Fitch Ratings announced on Friday it has affirmed Greece’s credit rating at BB+ with a stable outlook, though an upgrade to positive was expected.
Greece’s rating is underpinned by structural indicators, including governance scores, human development indicators and GDP per capita, that are among the highest of sub-investment grade peers, it said in a statement adding that these strengths are set against the legacies of the sovereign debt crisis, which include large stocks of public and external debt, as well as low medium-term growth potential and vulnerabilities in the banking sector.
Fitch has revised its GDP growth forecast to 2.3% in 2023 (from 0.9%), thanks to a positive carry-over effect (1.5 pp, given a much stronger than expected performance in Q4 of 2022) and reduced energy risks.
“We still expect household consumption to slow considerably this year, reflecting the impact of inflation and reduced credit demand. In contrast, investment growth will remain solid thanks to absorption of funds under the Recovery and Resilience Facility (RRF), while sectors such as tourism will continue to support exports,” Fitch said in its statement.
