Fitch Ratings has affirmed Greece’s credit rating at “BBB-,” revising its outlook from stable to positive.
The revision reflects the country’s strong fiscal performance and ongoing debt reduction efforts, the ratings company said.
In 2024, Greece recorded a budget surplus of 1.3% of GDP and a primary surplus of 4.8%, significantly surpassing both the government’s original 1% target and Fitch’s expectations. This marks a substantial turnaround from the 1.4% deficit recorded in 2023 and compares favorably with the current “BBB” median deficit of 3.7%. The improvement is attributed to structural reforms, including enhanced tax collection and strict expenditure controls.
Fitch forecasts that Greece will continue to post budget surpluses in 2025 and 2026, although these are expected to remain below 1% of GDP. In April 2025, the government announced fiscal easing measures worth €1 billion (0.5% of GDP) aimed at boosting investment and supporting pensioners and renters.
The strengthened fiscal position, along with real GDP growth of 2.3% in 2024, contributed to a sharp 10-percentage point decline in Greece’s gross government debt-to-GDP ratio, which now stands at 154%. Although this remains well above the “BBB” median of 52%, it represents a significant drop from the pandemic peak of 209% in 2020. According to Fitch, Greece has achieved the largest post-pandemic debt reduction among all investment-grade sovereigns it rates.
The country also maintains substantial cash buffers, estimated at €36 billion or 16% of GDP, which are sufficient to cover all debt maturities over the next three years. Fitch projects that Greece’s debt ratio could decline to approximately 120% of GDP by 2030 under current baseline assumptions.
The latest fiscal projections, outlined in the May 2025 update of the government’s medium-term plan, are fully aligned with the European Union’s revised fiscal framework. The plan reduces the cumulative growth rate of primary net expenditure for 2024–2025 to 4.2%, down from an earlier target of 6.5%, reinforcing the government’s commitment to fiscal prudence.
Despite continued strong public support for the ruling New Democracy party since the 2023 elections, the government’s handling of the investigation into the February 2023 Tempe rail disaster has sparked fresh protests. While the political fallout remains contained, increased public discontent may pressure policymakers to adopt a looser fiscal stance.
Greece’s defense spending remains relatively high, at nearly 3% of GDP under NATO definitions, reducing pressure for further increases and limiting medium-term fiscal risks.
Economic growth remained robust in 2024, with GDP expanding by 2.3% for a second consecutive year. The growth was driven primarily by domestic demand, supported by rising real incomes, employment gains, and continued investment momentum, bolstered by EU recovery funds. Net exports slightly detracted from growth due to the high import content of investment-related goods.
Fitch projects that Greece’s economy will grow by more than 2% in both 2025 and 2026, significantly outperforming the eurozone average of 0.4%. While direct exposure to escalating global trade tensions is limited – exports to the United States account for just 4% of total exports – Greece remains vulnerable to broader economic shocks within the European Union.
