Greek economy: Double exams by lenders and rating agencies

The Greek economy is going through double tests in the coming weeks with Fitch starting on Friday and the government’s meetings with lenders starting on Monday. The first appointment with the institutions is scheduled for October 10, while the result will be made public in November, paving the way for the disbursement of the last installment.

Analysts do not expect any surprises this year from the rating agencies and upgrades are expected for 2023, so the investment grade is expected to “come” after the elections. Economists see the growth potential of the Greek economy, but the country’s creditworthiness is expected to remain unchanged due to international uncertainty.

The appointments

In the first ten days of October, the first post-program assessment begins, focusing on the prerequisites outstanding from the previous supervisory regime, and the aim is the positive decision of the Eurogroup in December on the outstanding tranche of €740 million, in the framework of the relief measures of the Greek debt.

A series of around 22 outstanding issues must be closed, such as the issue of pending pensions and overdue debts of the State to individuals, privatizations to be improved and state guarantees of 470 million euros to be recovered. Among other things, it is the operation of the Independent Public Revenue Authority information system, the collection of at least 35% of the clawback, progress in the implementation of the primary care system, etc.

After the appointment on September 16 by DBRS and Moody’s, the assessment by Fitch follows on October 7. Also at the end of October, S&P is also expected to pitch in. The “meeting” with the ratings agencies is of particular interest as the government’s goal is to regain investment grade from 2023 and the Fitch report in question will at least give its intentions. It is noted that Moody’s and DBRS kept Greece’s credit rating unchanged, with stable outlooks, recognizing the progress and resilience of the economy in the generally unfavorable macroeconomic environment, which they estimate will affect the country. On July 8, 2022, Fitch confirmed the BB rating with a positive outlook that it had given at the beginning of the year, two notches before the investment rating.