KBRA Upgrades Hellenic Republic's Long- and Short-Term Ratings to BBB and K2; Outlook Revised to Stable
22 Nov 2024 | Dublin
KBRA Europe (KBRA) upgrades the long-term ratings of the Hellenic Republic to BBB. KBRA also upgrades the short-term ratings to K2. The Outlook on the long-term ratings has been revised to Stable following the upgrades.
| This credit rating is an unsolicited credit rating. | |
|---|---|
| With Rated Entity or Related Third-Party Participation | No |
| With Access to Internal Documents | No |
| With Access to Management | No |
KBRA's decision to upgrade the ratings reflects the substantial improvement of government finances in recent years, thanks, in part, to the very favourable profile of official creditor debt. Expectations that fiscal consolidation will continue also supports government fiscal metrics, coupled with a strengthening economy that grows faster than the euro area average. Notable uplifts in investment and employment, thanks to the National Recovery and Resilience Plan, should support strengthening creditworthiness. In contrast to this, some macro-imbalances still exist and public debt remains a burden. Greek banks' fundamentals have strengthened significantly in the recent years, helped by the “Hercules” scheme. The government has now fully divested from domestic systemically important banks, and those banks have returned to the bond market this year to meet their funding requirements. The Greek economy still struggles with weak competitiveness and trade imbalances, and indeed sources of fast-paced growth are elusive. Greece’s external account remains a credit weakness. Moreover, Greece has the highest stock of net external liabilities in the European Union, although a large portion is held by official creditors with very manageable terms. Finally, Greece now enjoys a stable political and prudent policymaking environment.
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