The rapid recovery of the Greek economy and the return to primary surpluses after the COVID-19 pandemic have been the two key factors driving the steady and significant reduction of public debt as a percentage of GDP. As a result, Greece regained its investment grade status in 2023 and continues to be upgraded by credit rating agencies, ANA reports.
Latest data for the first quarter of 2024 show that the general government debt dropped to 159.8% of GDP from 169.4% a year earlier and from the 207% peak reached due to the COVID-19 pandemic and economic support measures at the end of 2020.
While Greek debt remains the highest in the Eurozone, it has dropped to its lowest level since 2012, when it was reduced to 157.2% of GDP following the 53.5% haircut on Greek government bonds as part of the PSI (Private Sector Involvement). Furthermore, all rating agencies indicate a clear downward trajectory, with Scope Ratings predicting that by 2026 it will be lower than Italian debt as a percentage of GDP.
Bank of Greece forecasts, as recently stated by its Governor Yannis Stournaras, that Greek debt will decrease to 60% of GDP in approximately 40 years. This forecast assumes that primary surpluses close to 2% of GDP are maintained and economic reforms continue, ensuring a favorable difference between the debt repayment interest rate and the economic growth rate.
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