Fitch Ratings on Friday affirmed Greece’s credit rating at “BB” with a positive outlook, the same as the previous rating in January.
That rating stands two notches below investment grade, which Greece has not achieved since 2010.
“Greece has high income per capita that far exceeds both the ‘BB’ and ‘BBB’ medians,” noted the U.S. agency in its report.
“Governance scores and human development indicators are among the highest of sub-investment grade peers. These strengths are set against still very high levels of nonperforming loans (NPLs) and very large stocks of public and external debt,” Fitch commented.
It added that the positive outlook reflects a sustained expected decline in public sector indebtedness, in the context of still low average borrowing costs, despite the sharp rise in government bond yields this year.
Greek banks have made substantial progress on asset quality improvement, sharply reducing the level of NPLs in the banking sector, Fitch said.
The report also noted that government debt as a share of gross domestic product declined to 193.3 percent by the end of 2021, and is projected to fall further to 171.6 percent by 2024, driven by improving primary balances and favorable growth-interest costs dynamics. ■