Positive Ratings, Strong Surpluses, Loan Repayments, and Market Shifts – The 4 Positive Messages for Greek Public Debt

Last week was rich in news concerning Greece’s fiscal stability and its ability to effectively utilize public resources. Despite having the highest public debt-to-GDP ratio among Eurozone countries, Greece continues to record positive results, boosting international market confidence. This is attributed to robust growth rates, fiscal surpluses, and the successful strategy implemented by the Public Debt Management Agency (PDMA). International rating agencies, now holding a favorable stance after the decade-long debt crisis, emphasize what Greece should focus on long-term. The latest upgrade comes from Fitch Ratings. Fitch Ratings upgraded Greece’s outlook from ‘stable’ to ‘positive,’ maintaining the credit rating at BBB-. According to Fitch, this reflects improved fiscal metrics, reduced public debt, and economic resilience, paving the way for another potential credit upgrade in November. A strong primary surplus also guarantees continued good performance in debt servicing and fiscal health. According to data from the Ministry of Finance as of May 15, the primary surplus of the state budget for January-April 2025 reached €5.16 billion, far exceeding the target of €1.97 billion. This surplus is mainly due to increased tax revenues, which rose to €22 billion, and restrained spending, which was €2.98 billion lower than budgeted. Furthermore, Kyriakos Pierrikakis confirmed plans for early repayment of loans from the first bailout package, aiming to fully repay them by 2031—ten years earlier than initially scheduled. The plan involves annual payments of €5 billion, funded by Greece’s reserves, primary surpluses, and new bond issuance. Additionally, the PDMA canceled the planned May 21 bond auction, signaling Greece’s strong fiscal position and reduced borrowing needs.