Benefits and Challenges for the Greek Economy After S&P Upgrade

Standard & Poor’s (S&P) met expectations by upgrading Greece to a higher tier of investment grade in its assessment on April 18, 2025. S&P assigned BBB status with stable outlook to Greece’s economy, aligning with recent upgrades by DBRS and Moody’s. This upgrade indicates that Greece has not succumbed to global uncertainties caused by trade wars, despite S&P lowering macroeconomic forecasts for 2025. The government hoped that the anticipated upgrade would follow Italy’s example, which managed to secure a BBB+ rating from S&P despite negative global indicators. Positive prospects for Greek bonds seen in previous evaluations signaled potential future upgrades. With this latest upgrade, Greece secures a stronger foothold within the investment grade category, signaling confidence to bond markets and encouraging Fitch and Moody’s to act similarly. This positions Greece to borrow at better rates, reducing debt servicing costs while solidifying recovery from the decade-long crisis. However, challenges persist as international tariff disputes threaten progress. Despite Greek bonds outperforming European counterparts recently, issues like delays in reforms, demographic concerns, and the expiration of the Recovery Fund remain critical hurdles needing solutions.