Commentary

Greece: The Road to a More Sustainable Growth Model

Sovereigns

Summary

Over the past four years, and despite multiple shocks, including the pandemic and the energy crisis, the Greek economy has demonstrated remarkable resilience. Real GDP growth has overperformed the Euro Area average each year since 2021, with latest projections pointing to a continuation of this trend. In our view, this is the result of a rebound after years of negative growth, but also an improvement of its fundamentals due to fiscal and economic adjustments.

-- Now, Greece's economic performance is more export and investment-oriented, less consumption-debt driven and shows less imbalances compared with the recent past.
-- Greece undertook three adjustment programs from 2010 until 2018, implementing a series of economic, fiscal and financial sector reforms, which improved its competitiveness, fiscal position and enhanced financial stability.
-- In an environment of high uncertainty, Greece's ongoing economic recovery faces emerging challenges to its durability and resilience.

"Accelerating the reforms to boost investment and productivity and to take advantage of external funds will further support Greece's efforts to deal with crisis legacies, address structural challenges successfully and further sustain growth beyond the expiration of Next Generation EU funds," said Spyridoula Tzima, Vice President, Morningstar DBRS, Global Sovereign Ratings.

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