The U.S. credit rating agency S&P Global has affirmed Greece’s credit rating at the investment-grade level of BBB with a stable outlook.
S&P is the fourth in a row among the five rating agencies recognized by the ECB to have assessed the Greek economy in the second half of 2026. In September, Scope upgraded Greece to a BBB+ rating, while that same month, Moody’s and DBRS upgraded the outlook on the country’s credit ratings—at the Baa3 and BBB levels, respectively—from stable to positive. Fitch will conclude the 2026 rating cycle in November.
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In its announcement explaining the reasons for its credit rating decision, the U.S. agency notes that Greece is on track to post a primary budget surplus in 2026 for yet another year, which it estimates at 3.8% of GDP, thanks to reforms aimed at improving tax compliance and reducing unemployment, and despite an increase in public investment spending.
“Although Greece’s external imbalances are high, we believe that its membership in the eurozone and adherence to EU fiscal rules offer protection against the risk of a balance-of-payments shock,” it states, adding that economic growth has shown resilience despite successive shocks and that the outlook remains strong thanks to a high stock of planned investments.
Regarding the stable outlook for the credit rating, the agency notes that it balances Greece’s strong economic and fiscal performance against its high levels of external and public debt.
It notes that it could upgrade the issuer’s rating if Greece’s external imbalances improved substantially and in a sustainable manner. “For example, this could happen if we saw a reduction in the economy’s dependence on imports. We could also upgrade Greece if the country’s external debt—a large portion of which is public—were to decline substantially.” On the other hand, S&P states that it could downgrade the credit rating if Greece’s fiscal performance were to deteriorate significantly.
S&P forecasts that fiscal targets will be exceeded this year, noting that monthly data through August indicate that the government budget is approximately 1.1 billion euros above target, thanks to strong tourism revenues, as well as a further decline in unemployment and the impact of tax compliance reforms that are boosting tax revenues. Specifically, it projects a total budget surplus—including interest payments on public debt — of 0.8% of GDP, which will exceed the government’s initial target by approximately 1 percentage point of GDP. “This improved forecast comes despite the fact that spending is exceeding the budget and that recent announcements point to an increase in domestically financed investments, which will begin this year,” he adds.
It also forecasts that overall fiscal surpluses will continue in the coming years, averaging 0.2% of GDP during the period 2027–2029, along with a primary surplus of 3.2%.
S&P estimates that net public debt, after deducting cash reserves—which it puts at 33 billion euros or 12.4% of GDP, will fall to 123% of GDP by the end of this year, marking an improvement of 40 percentage points compared to the end of 2019. “Our expectation of continued fiscal discipline, combined with steady nominal GDP growth, supports our forecast that the debt-to-GDP ratio will decline further, reaching 107% of GDP by the end of 2029,” he adds.
Economic activity has shown resilience, led by investment, amid challenging external conditions, the U.S. firm notes. Tourism and investment activity are the drivers of growth, with the latter being particularly supported by the EU-funded Recovery and Resilience Facility” (RRF), which is entering its final phase.
Income levels are gradually approaching the European average, while a consistently strong investment portfolio underpins growth prospects. “Combined with the likely continued improvement in the labor market, we project that the Greek economy will grow by an average of 2.1% over the 2027–2029 period. This would translate into per capita GDP reaching $35,100 in 2029—or about 55% of the EU average—up from 47% in 2019,” notes S&P.
Source: APE-MPE
