Scope Ratings Maintains Greece’s Investment Grade BBB with Stable Outlook

The credit rating agency Scope Ratings has maintained its BBB investment-grade rating for Greece, assigning it a stable outlook. The Greek economy remains supported by strong institutional backing from the Eurozone and the EU, qualifying for the ECB’s bond-buying program. Greece is expected to receive approximately €36 billion in grants and loans through NextGenerationEU by 2026, having already secured 59% of this amount by 2025. Financially, Greece recorded a primary surplus of 4% of GDP and an overall fiscal surplus of 1.3% in 2024. Debt is projected to decrease to 125% of GDP by 2030, bolstered by a substantial cash reserve (€42 billion) ensuring robust liquidity. However, challenges persist: high public debt despite a declining trend, ongoing banking sector weaknesses, and reliance on state support. Structural issues such as low productivity, adverse demographic trends, and limited economic diversification also hinder growth. Scope highlights that the stable outlook reflects balanced risks. Positive factors that could lead to an upgrade include sustainable debt reduction, improved growth prospects, and further stabilization of the banking sector. Negative factors include fiscal de-stabilization, increased banking sector risks, and economic resilience erosion. Externally, the country remains exposed due to structural current account deficits and tourism dependence. However, external debt is predominantly government-driven with favorable terms (euro-denominated and long-term). Scope assesses banking stability as relatively improved, with lower NPLs (6% in 2024), better capital adequacy indicators, though tax arrears remain high. Lastly, social and environmental risks are significant, marked by population aging, limited renewable energy adoption, and moderate social outcomes, despite a strong governance framework.