Scope Ratings credit rating agency upgraded on Friday the Greek economy to “BBB” with a stable outlook, from “BBB-“ with a positive outlook.
Scope was the first agency recognized by the European Central Bank to give Greece investment grade in August 2023 and is now the first to upgrade its creditworthiness within investment grade.
The reduction in public debt, the improved resilience of the banking system and the stronger growth trend were the main drivers that led to the upgrade, according to the German agency.
“The still-high public debt and structural economic weaknesses remain limiting factors for the credit rating,” it added in its statement.
The upgrade to “BBB” reflects Scope’s expectation for a continued reduction in Greece’s general government debt ratio in the coming years.
This reduction is driven by favorable debt dynamics, alongside stronger-than-expected primary fiscal surpluses and the resulting further reduction in the overall fiscal deficit.
The resilience of the banking system is strengthened by progress in reducing nonperforming loans (NPLs), the privatizations of systemic banks, and the gradual amortization of deferred tax credits (DTCs) on bank balance sheets, Scope commented.