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The Fitch He maintained Greece in BBB credit grade Friday night, with the American rating agency confirming the fixed perspectives (outlook) of the country.
The assessment of the American house is based on the levels of per capita income that exceed the average of the states with a BBB assessment and the governance indicators that are slightly above average, as well as the reliable policy framework reinforced by EU and euro area participation. The fiscal and macroeconomic adjustment has accelerated in recent years, Fitch says, strengthening the fundamental dimensions and credibility of the country's policy. These advantages are offset by the effects of the sovereign debt crisis, in particular the very high but constantly decreasing burden of public debt, the significant loss of economic production, persistent external imbalances and potential liabilities of the banking sector.
Durable economic growth
The development of the Greek economy remained stable at levels slightly above 2% in 2023-2025, despite various geopolitical and commercial turbulences. The house foresees slightly lower growth in 2026, mainly due to the negative effects of the conflict in the Middle East, but the economy will benefit from the last year of investments through the Recovery Fund. In the medium term, Fitch expects gradual convergence of incomes with euro area bonds, based on an estimated rate of potential growth of 2%. Domestic demand will remain the main growth lever, supported by the gradual improvement of household balance sheets, steady employment growth and higher investments.
Major financial catch
Greece recorded fiscal surpluses in 2024 and 2025, an excellent fiscal performance compared to states with the same credit assessment and eurozone members. The current average deficit for states with a "BBB" rating is 3.1% of GDP, while the overall deficit of the eurozone was 2.9% of GDP in 2025. Strong fiscal performance was supported by structurally higher revenue, due to greater tax collection, and strict expenditure control. Fitch "sees" a smaller budget surplus in 2026, due to fiscal relaxation, including temporary and mainly targeted energy compensation measures. However, the Greek government does not expect to implement a major fiscal relaxation campaign despite the large fiscal margin.
Reliable financial framework
The recent budgetary results and the 2026 budget plan stress the government's firm commitment to budgetary prudence. The house considers this commitment to be extremely reliable, as demonstrated by the strong performance history during the post-pandemic period and supported by broad social consensus on sound budgetary policies. In July 2025, parliament largely approved a domestic fiscal rule requiring a balanced primary balance.
Fixed debt reduction
Fitch says that the ratio of public debt to GDP decreased by almost 20 percentage points in 2024 and 2025, reaching 146 % of GDP, thanks to sustainable economic growth and budget surpluses. However, this figure is still 2.5 times higher than the average of the countries with a BBB rating, which is 58%. The house expects debt to continue to decline rapidly in the medium term, approaching 120% to 2030 in its basic scenario, supported by stable nominal GDP growth and significant primary surpluses after 2027. Cash reserves remain at historically high levels, allowing early bond repayment and covering the maturity of the next three years.
Low financial risks
Greece's favourable debt profile, notes the house, with a long average maturity of 19 years and favourable interest rates, as well as very high cash assets, significantly reduce market risks and act as a "cushion" against potential volatility disturbances in bond markets. The difference between growth rate and interest rate is favourable, with the indirect interest rate on debt stock around 1.5%, much below the estimated nominal growth path of GDP, close to 4%.
Large and persistent current account deficit
The large current trade deficit declined in 2025, but high energy prices will lead to its expansion this year. The current account deficit is around 6% of GDP from 2023, it is significantly higher than the current average of the category "BBB" located at 0.2%. Structurally, the low savings rate is the main reason for the significant current account deficit, it is stressed, while import-based investments are expected to intensify pressure in the medium term. "Participation in the Eurozone mitigates external financing risks and we expect no disruption in external capital flows," the house says, however.
Strengthen the banking sector
Fitch upgraded systemic bank ratings to an investment grade during 2025, reflecting improvements in the operational environment of Greece and bank credit profiles, including a long-term history of healthy profit creation, the completion of most of asset quality resolution, enhanced capital positions and stable deposit-based funding. Fitch expects that the banking sector will benefit from robust economic growth, continuous business growth and gradual recovery in the retail banking sector.
Bank-State connection
A time-consuming issue is the very close link between the State and the banks due to the large proportion of deferred tax requirements (DTCs) in bank funds (41% of Common Equity Tier 1 funds) — Common Equity Tier 1). DTCs continue to constitute a possible obligation for the state, which does not exist in any other euro area Member State, despite recent plans by banks to speed up depreciation of DTCs, which will help normalise their capital structures. In addition, public guarantees on the major transches of the Hercules programme, which aims to accelerate the reduction of unperforming loans in the banking system, amounted to around EUR 18 billion or 8% of GDP at the end of 2025.
ESG – Governance
Greece has ESG Relevance Score "5[+]" scores in the areas of political stability and rights, as well as the rule of law, the quality of institutions and regulatory framework and corruption control. These scores reflect the great importance of World Bank Governance Indicators (WBGI) in Fitch's SRM rating model. Greece holds an average position in the WBGI ranking of 61.6, reflecting the recent history of normal political transitions, a moderate level of political participation rights, moderate institutional capacity, established rule of law and a moderate level of corruption.
Factors that could lead to negative assessment/degradation
– Public finance: Unable to maintain the ratio of government-to-GDP debt in declining orbit, for example due to structural fiscal relaxation or the implementation of significant potential liabilities.
– Macroeconomic/External: A negative disturbance that will affect Greece's medium-term development potential or aggravate external imbalances.
Factors that could lead to positive evaluation/upgrade
– Public Finance: Further significant reduction in the general government debt ratio to GDP over the medium term, due to significant primary surpluses and continued durable growth.
– Macroeconomic Environment: Improve medium-term growth dynamics and performance, for example, due to higher investments or the implementation of structural reforms.
