Fitch Ratings affirmed on Friday its BB credit rating for Greece with a stable outlook, but raised its projection for the country’s growth this year to 4.3%.
Its report noted that the rating – two notches below investment grade – reflects the weak medium-term growth prospects, the persistently high level of nonperforming loans and the very high volume of general government deficit and external debt.
Fitch stressed that the Greek economy has outperformed its expectations in recent months, despite the restrictions since last fall. The economy shrank last year by just 8.2%, against Fitch’s projection for 10.2%.
The agency has now revised its estimate for this year’s economic expansion to 4.3% from 3% previously, and anticipates gross domestic product to increase by 5.3% in 2022 and 3.5% in 2023.
The main risks for these estimates, Fitch points out, are the new rise in coronavirus cases that could lead to fresh restrictions and discourage foreign visitors in the summer months. Another potential threat to the economic recovery would be the impact of the pandemic on the employment market, when the support measures are fully lifted.