Any impact on Greece’s finances from an increase in the country’s borrowing costs will be limited, Standard & Poor’s estimates in a report released on Tuesday.
In the report that focused on “which countries are better and worse positioned to deal with an increase in interest rates,” the international credit rating agency said that Greece, along with the majority of the 18 developed countries included in the report, will be able to absorb the primary impact from an interest rate increase up to three percentage points (300 basis points).
More specifically, Greece’s capital spending will be raised to 2.8% of the country’s gross domestic product in 2023 from 2.5%, which is the baseline scenario provided that interest rates are raised by one percentage point. Capital spending would rise to 3.1% if interest rates were raised by three percentage points, the S&P report noted.
Japan, the US and Portugal would see their capital spending rise by more than one percentage point in 2023 under the baseline scenario, while Italy and Japan would pay more than 3.7% of GDP due to their high debt levels.