The trajectory of public debt remains one of the most critical indicators of fiscal stability and economic credibility. Greece’s sustained decline in public debt—combined with improving fiscal performance—has significantly strengthened its standing in international markets.
In this context, maintaining its investment-grade rating and further upgrading its creditworthiness hinge on continuing prudent fiscal policy and deepening structural reforms that bolster the economy’s resilience amid uncertainty.
This positive trend was reaffirmed in the first half of 2026, when major international credit rating agencies confirmed their confidence in Greece’s economic outlook—keeping Greek sovereign debt at investment-grade status.
A central factor behind these favorable assessments is the substantial and continuous reduction in public debt, supported by early repayments and a robust cash buffer.
Equally important are Greece’s strong fiscal results—including high primary surpluses—the banking sector’s recovery (with non-performing loans falling sharply to 2.7%, according to the Bank of Greece), political stability, and successful absorption of Recovery Fund resources—all of which have helped sustain growth above the EU average.
However, rating agencies also highlight key constraints. Public debt remains the highest in the eurozone, and structural weaknesses persist—including low productivity, adverse demographics, a large current account deficit, and overreliance on tourism.
Additionally, climate-related risks and the anticipated slowdown in growth after European funding expires in 2026 pose future challenges—though prospects remain broadly positive, provided fiscal discipline continues.
Greece vs. the Eurozone
According to Eurostat data and the European Commission’s spring 2026 forecasts, Greece’s public debt-to-GDP ratio continues to improve steadily. It fell from 154.2% in 2024 to 146.1% in 2025, and is projected to decline further—to 140.7% in 2026 and 134.4% in 2027.
The cumulative reduction—from 209.4% in 2020 to 140.7% in 2026—amounts to roughly 69 percentage points, underscoring a pronounced downward trend in the debt-to-GDP ratio.
Fastest Debt Reduction in the Eurozone
In 2025, Greece recorded the fastest public debt reduction among eurozone countries, with an annual drop of 8.1 percentage points. This reflects sustained primary fiscal balances and rising nominal GDP—factors that continue to underpin Greece’s fiscal consolidation path.