Moody’s recently raised Greece’s credit rating outlook to “positive,” despite maintaining a Ba1 rating due to certain factors. The credit profile is influenced by economic power, institutional strength, fiscal health, and vulnerability to event risks.
While Greece’s economic power is considered moderate, efforts to diversify the economy and attract investments are crucial for growth. Institutional and governance improvements have been noted, with progress in areas like tax compliance and public administration.
Despite a high debt index, Greece has seen a reduction in its debt-to-GDP ratio and aims for further decrease by 2025. However, potential obligations from public sector entities could impact fiscal strength.
Greece’s sensitivity to event risks, including political instability and exposure to external shocks, remains a concern. Nevertheless, the country’s banks have shown improvement and liquidity risks are low due to strong public debt structure and reserves.
Overall, Greece’s credit rating reflects a mix of positive developments and challenges, with ongoing efforts needed to enhance economic stability and resilience.