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Greece continues to improve its rating: from BB- to B

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Greece continues to improve its rating: from BB- to B
August 13
09:00 2018

Greece does not stand still, gradually pulling the national economy out of the money pit. A fairly competent policy has led to the stabilization of relations with borrowers from Europe, which pushed the international rating agency Fitch to reconsider the country’s long-term rating in the foreign currency. Greece has immediately improved its position by two steps: from the status of “BB-” to “B”.

By the way, a rating three steps higher than the current one is considered to be attractive for investments.

The rating agency has issued a press release explaining its decision. It says that over the past year, the Greeks showed a budget surplus of 0.8% of GDP, as well as a primary budget surplus (excluding debt -servicing costs) at the level of 4% of GDP.

This has exceeded the forecasts of experts who calculated that the primary budget surplus of Greece for 2017 would be 1.9% of GDP.

Analysts of the agency Fitch believe that the Greek government will maintain strong budgetary indicators even after the completion of the assistance program. The consensus forecast on the primary budget surplus for the decade is 2.7% of the gross domestic product.

A few more interesting figures: experts from Fitch have calculated that by 2030 the national debt will have decreased to 123% of GDP. The calculation was made with GDP growth at the level of 3.4%. By the way, currently, the national debt is 182.7% of GDP.

A more stable political background in the country has become the reason for improving the rating. European creditors of Greece are not very afraid that certain radical forces will come to power, which will dramatically change the policy adopted in the framework of rendering assistance to Athens. We will monitor the situation in Greece and hope that the national “economic miracle” of the oldest democracy in the world is yet to come.

 

The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade

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