Greece’s BBB- economy is set on a positive path, with public debt reduction, banking resilience, and structural reforms driving a forecasted debt-to-GDP decline, according to German-based Scope Ratings.
In its report, ‘Continued debt reduction supports favourable credit trajectory,’ Scope Ratings outlined Greece’s strengthened economic path.
Public debt reduction, a more robust banking sector, and structural reforms are addressing Greece’s vulnerabilities, with the agency’s primary scenario projecting sustained primary budget surpluses to support fiscal stability.
The report projected Greece’s debt-to-GDP ratio will decline to 150.5 per cent by year’s end and further to 132.8 per cent by 2029, marking a strong recovery from the 207 per cent peak in 2020.
“If achieved, the 2029 figure would represent Greece’s lowest debt-to-GDP ratio since the start of the Greek crisis in 2009,” it stated, noting it would also fall below Italy’s debt ratio by 2027.
The report includes positive outlooks, like the anticipated early repayment of €7.9 billion in loans due in 2026-2028.
This improvement is supported by Greece’s revised growth forecasts, which Scope sees at 2.4 per cent this year and 1.9 per cent in 2025, a slight upgrade from its July estimates.
“Greece’s economic growth will exceed that of the eurozone, which we estimate at around 1 per cent this year and 1.5 per cent in 2025,” Scope noted, stressing factors like tourism revenues, robust private consumption, and increased investor confidence.
The agency expects average growth of 1.4 per cent from 2026 to 2029, “optimistically assum[ing] that there will be no material crisis until 2029 and that there will be no annual recession over this horizon,” it added.
The report also references Greece’s recently submitted medium-term fiscal programme, which forecasts permanent growth measures valued at €2.9 billion (1.2 per cent of GDP) for 2025, following €1.8 billion (0.8 per cent of GDP) in 2024.
Scope reaffirmed Greece’s BBB- rating last July, upgrading the outlook from stable to positive.
“Nevertheless, Greece’s credit rating still faces challenges due to its elevated sovereign debt ratio, which is the second highest of the 40 sovereigns it rates, after Japan,” it added.
The agency underlines that Greece’s debt structure is “gradually weakening” as it repays bailout loans early while relying on market funding amid the European Central Bank’s quantitative tightening.
The report warned of rising net interest payments as Greece transitions to costlier market financing, projecting an increase from 6.3 per cent of revenues this year to 7.9 per cent by 2029.
“The long weighted average debt maturity of 19.2 years is also gradually declining,” it concluded.
