Athens: DBRS Morningstar has upgraded Greece’s credit rating to ‘BBB’ from ‘BBB low’, citing improvements in the country’s banking sector and a continued reduction in its general government debt ratio. The agency also revised Greece’s outlook from positive to stable.
“The upgrade reflects Morningstar DBRS’ view that legacy risks in the banking system have receded along with a continuation in overperformance in fiscal targets,” DBRS stated in a press release.
Greece, which once had the highest debt-to-GDP ratio in the eurozone, has significantly reduced its debt burden over the past four years. Since 2020, the country’s debt has declined by more than 40 percentage points, reaching 154% of GDP in 2024, with projections indicating a further drop by the end of the year.
The Greek economy is expected to grow by 2.3% in 2025, more than twice the eurozone average. Additionally, the government anticipates a primary budget surplus of 2.4% of GDP, driven by increased investment and strong tourism revenues.
“This will likely facilitate a further significant reduction in the public debt-to-GDP ratio, which is projected to fall to below 140% by 2027,” DBRS added.
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Greece has experienced a series of credit rating upgrades since autumn 2023, with S&P Global Ratings and Fitch lifting the country out of the junk category after 13 years. However, Moody’s remains the only major rating agency that still places Greece one notch below investment grade.
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Greek banks, once at the center of the nation’s financial crisis, are now regaining stability and returning to profitability. After being nationalized in the aftermath of the 2009 financial meltdown, they required multiple government-backed capital injections to survive. However, in a major turnaround, Greek banks secured European Central Bank approval in 2023 to resume dividend payments for the first time in 16 years, having successfully reduced bad loan ratios, eliminated state ownership, and restored profitability.
