Moody’s looks at debt reduction and high growth for Greece in 2022, in a new report.
Analyzing the credit prospects of the eurozone countries in 2022, the ratings agency estimates that the Greek economy will grow by 4.3% in 2022, while the Greek debt will decrease by 10.1 percentage points to reach 191% of GDP, with the reduction to be the largest of all the other Eurozone countries.
The high debt levels caused by the pandemic will be the biggest problem for economies and governments and the biggest risk for their borrowing costs, as the withdrawal of support measures and inflation increase, Moody’s points out, increase the risks surrounding growth and undermining debt burden efforts.
According to Moody’s calculations, the Eurozone economy as a whole will be 2.7% higher than pre-pandemic levels in 2022, with Greece’s most marginal performance attributed to the country’s heavy dependence on tourism (similar to the image of Italy and Spain).
Moody’s expects eurozone countries to continue to benefit from favorable economic conditions in 2022, but the big risk, however, will be high debt levels. The agency estimates that the outlook for the creditworthiness of the economies for the next 12 to 18 months is stable, driven by positive economic and monetary conditions.
Unemployment
A second challenge is unemployment levels, especially in countries that are deeper in the vortex of the debt crisis, such as Greece, Spain, Italy and France.
Unemployment is estimated to continue to be a factor limiting policy choices in the Eurozone in the coming years, even in an environment of strong recovery from the pandemic.
Morgan Stanley “sees” an upgrade from Moody’s
It is recalled that Morgan Stanley believes that Moody’s will upgrade Greece’s credit rating from “Ba3” to “Ba2” on Friday, thus identifying it with the “BB” ratings of the Canadian company DBRS, which is same as those of the American agencies Fitch and Standard & Poor’s.
Thus, the Greek debt is now based on the ratings of all four of these agencies which the ECB accepts on order to buy Member State bonds without exceptions and which are two “steps” away from the famous “investment grade”.
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