On Friday evening, Standard & Poor’s rating agency maintained Greece’s BBB- rating (investment grade) and positive outlook without releasing an updated report. This outcome was expected, as the market anticipates an upgrade of Greece’s rating next spring.
Standard & Poor’s maintains positive outlook for Greece’s investment grade
It is worth noting that S&P had elevated Greece to investment-grade status on October 20, 2023 with a BBB- rating. In its previous assessment last April, the agency further improved Greece’s outlook from stable to positive. It set the stage for another potential upgrade within the next 24 months.
In fact, it is the only major rating agency that currently assigns Greece a positive outlook. S&P is seen as the leading agency most likely to upgrade Greece to the second rung of the investment tier.
In its most recent assessment, S&P predicted that the government would maintain strict fiscal discipline, helping to reduce public debt as a percentage of GDP.
Moreover, S&P forecasted that Greece would continue to grow at a rate higher than that of the Eurozone at least until 2027.
Upcoming assessments from Fitch and Scope: What to expect
As for the remaining ratings this year, Fitch Ratings will announce its assessment of Greek bonds on November 22nd, and Scope will do so on December 6th.
S&P’s stance is more positive than that of other credit rating agencies that are more conservative. It is worth noting, however, that Moody’s, the strictest of the major agencies, revised its outlook for Greece to positive from “stable last month. Though it kept its rating below investment grade at Ba1. This followed a prior upgrade from Ba3 a year earlier.
Moody’s is the last remaining major ratings agency that continues to classify Greece as non-investment grade. It places it one notch below the investment grade threshold.
On the contrary, DBRS upgraded Greece to investment grade in September 2023. Standard & Poor’s upgraded it in October, and Fitch did so in December after 13 years in the junk category.
“With the possibility of economic growth and fiscal performance exceeding our expectations, Greece’s fiscal strength could improve faster than currently expected,” Moody’s said in Friday’s report, according to Reuters.
Upcoming evaluations of Greece investment-grade status
Attaining investment grade status will allow the country to attract more institutional investors to purchase Greek bonds. This will lead to an increase of capital inflows and will further help contain borrowing costs for the Greek government and businesses.
A series of new reports by the other major credit agencies to evaluate the progress and status of the Greek economy will take place by the end of the year.
