Scope confirmed Greece's BBB- rating, upgrading the outlook to positive. According to the rating agency's analysts, the upgrading of the outlook is the result of debt reduction, improvement in the resilience of the banking system and favourable momentum in structural reforms. "A "drag" on Greece's rating remains its very high public debt and the ongoing structural weaknesses of the economy, they said.

Scope expects Greek debt to continue to decline in the coming years. After all, this was one of the main reasons why the agency upgraded Greece to investment grade last August. 

Moreover, the consolidation of the banking system and the reduction of red loans, combined with the full privatisation of the systemic banks, support the resilience of the sector, analysts point out.

And at the same time, the adoption of structural reforms and investments facilitated by the Recovery Fund are strengthening the resilience of the economy and potential growth rates.

It is noted that the positive outlook reflects Scope's view that a Greek rating upgrade is more likely in the next 12 to 18 months.

To upgrade Greece's rating, the agency wants to see one or more of the following:

• Nominal growth and fiscal consolidation will drive debt on a strong and sustained downward path over the medium term.
• Banking sector risks are to be further contained through capital strengthening, further reduction of non-performing loans, and/or reduction of the linkages between the state and banks.
• Structural-economic and external imbalances narrow, increasing the medium-term growth potential and enhancing macroeconomic sustainability.

DEBT

According to the agency's calculations, Greek debt will fall to 151.9% of GDP by the end of 2024 and drop to 130.7% by 2029. If these projections are confirmed, Greece will have brought its debt to its lowest levels since the beginning of its crisis (in the first quarter of 2010) and below the levels of Italy's debt by 2026.

In fact, analysts note that their forecasts for Greek debt have been strengthened due to continued fiscal outperformance, as the government is expected to meet, if not exceed, its primary surplus target of 2.1% of GDP in 2024.

Scope revises its medium-term primary balance projections and now expects a surplus of 2.5% of GDP in 2025–2027 for the remainder of the Mitsotakis administration, compared to previous estimates of a surplus of only 1%.

Scope's forecasts also call for growth of 2% this year, 1.8% in 2025 and 1.4% on average from 2026 to 2029. These are, as noted, relatively optimistic forecasts that do not include a recession in the medium term.

ΗΑΤΖIDAKIS STATEMENT

"Today's upgrade of the outlook of the Greek government's sovereign credit rating from stable to positive by Scope Ratings, following the corresponding upgrade by Standard & Poor's last April, emphatically confirms the success of the economic policy implemented and the positive prospects of the Greek economy," said Minister of National Economy and Finance Kostis Hatzidakis, following the announcement by the agency.

"Scope's report highlights, among other things, the rapid reduction of public debt, the achievement of strong surpluses, the reduction of non-performing loans combined with the disinvestment from systemic banks and the adoption of structural reforms that enhance the resilience and growth dynamics of the economy.

 Today's assessment therefore sends a signal that the government's economic policy is being continued and accelerated. We are therefore proceeding with fiscal seriousness, aiming at further attracting investment, achieving convergence with the EU and strengthening social policy.