Ratings Agencies: Why they’re upgrading estimates for Greek growth

The economists of international ratings agencies and banks are upgrading their forecasts for the growth of the Greek economy, estimating that the recovery of the Greek economy is moving in a higher trajectory than expected.

The economy, moreover, according to foreign bank economists, is entering a multi-year upward cycle of strong growth, while the Greek Recovery Plan is expected to mobilize investment resources of 59 billion euros over the next six years and a total of 100 billion euros together with the NSRF , that is, as much as the investment gap created during the 10-year debt crisis.

DBRS Morningstar went e.g. to upgrade its estimates for the Greek economy, forecasting in its baseline scenario a GDP growth rate of 5% at average levels for both 2021 and 2022. It estimates that the vaccination program will support growth from the second half of 2021 and in 2022, at a time when unemployment and the real estate market are moving better than expected, while household balance sheets are in good shape, supported by fiscal support measures.

Growth of 6.5% in 2021 and 3.6% in 2022 is expected for Greece and the German credit rating agency Scope Ratings, which is considered as the European response to US rating agencies and aims to join the group of four major firms receiving the ECB for the assessment of individual euro area member countries.

ING upgraded its estimates for the growth of the Greek economy in 2021 after the best expected data for the growth of the first quarter and ING, now forecasting a GDP growth rate of 4.7% this year for Greece, compared to 3.2% which was its previous forecast.

It should be noted that Ethniki also revised the growth upwards to 5.7%, an estimate that incorporates a forecast for an annual increase in tourism revenues of 80% compared to last year, although they will remain lower by 55% compared to 2019.