In the midst of global uncertainty, Greece has successfully passed the latest assessment from the Fitch rating agency, bolstered by a rapid decrease in public debt and a strengthening growth momentum across various sectors.
With this upgrade of the outlook, Greece has edged closer to surpassing the investment grade threshold within the next 12 to 18 months, following similar actions by other rating agencies (S&P, DBRS, and Scope Ratings). This marks a positive development for the market, as the US rating agency continues the positive trend initiated by the aforementioned agencies earlier this year.
This upgrade stems from several key factors:
Among the significant developments that contributed to the Fitch outlook upgrade, the following are particularly noteworthy:
- The buyback of GDP-linked warrants by Greece. On May 14, the Public Debt Management Agency repurchased GDP-linked warrants from the 2012 PSI for 156 million euros. These bonds, maturing in 2042, had stipulations tied to Greece’s economic performance (GDP exceeding 265 billion euros and growth above 2%), which threatened to activate additional payments of 300-400 million euros in interest by 2027 or 2028.
- The commitment to repay the entire loan from the first memorandum (GLF) a decade ahead of schedule, pushing the due date from 2041 to an earlier date. The Greek State plans to initiate repayments this year, most likely in December, starting with 5.29 billion euros for GLFs maturing between 2033 and 2041. These payments will address a proportionate share of the total loan balance.
Fitch also highlighted the prudent and stable fiscal framework supporting the country, commending the government’s strong commitment to fiscal discipline. Moreover, it noted that the latest official fiscal projections, including the updated medium-term fiscal plan for May 2025, are fully consistent with the new EU fiscal framework.
