Moody’s confirmed Greece’s sovereign credit rating at the investment-grade level of Baa3 with a stable outlook, citing stronger-than-expected fiscal performance and continued solid macroeconomic results since the pandemic.
The credit rating agency said the Baa3 rating and stable outlook reflect Greece’s track record of reforms, which have led to improvements in institutions and governance, stronger investment activity and a healthier banking sector.
Moody’s noted that although Greece’s public debt remains very high as a percentage of gross domestic product, its favourable debt structure and significant cash reserves reduce financial risks.
The agency also highlighted the country’s ability to absorb substantial funds from the European Union, which—together with private investment—are expected to support economic growth in the coming years. Continued reforms are also projected to strengthen long-term growth potential and partially offset negative demographic trends.
According to Moody’s estimates, Greece’s fiscal performance since the pandemic has consistently exceeded expectations and remains a key factor supporting the country’s credit rating.
The agency projected Greece’s primary budget surplus at 4.4 per cent of GDP in 2025, driven by strong economic growth, robust tax revenues and strict control of public spending.
This followed an already strong fiscal result in 2024, when the primary surplus reached 4.7 per cent of GDP, helping reduce the country’s debt-to-GDP ratio to approximately 154 per cent at the end of that year.
Moody’s estimated that the debt ratio fell further to around 148 per cent of GDP by the end of 2025—the lowest level recorded since 2010.
The agency expects primary surpluses to remain significant at just above 3 per cent of GDP in 2026 and 2027 before gradually declining thereafter. This trend is projected to continue driving a rapid reduction in the debt ratio to roughly 140 per cent of GDP by 2027.
Moody’s also said Greece’s macroeconomic performance remains strong and broadly consistent with expectations of sustainable growth led by investment.
The agency estimated that real GDP expanded by around 2.1 per cent in 2025, roughly in line with the growth rates recorded in 2023 and 2024 despite a weaker global environment and the normalisation of tourism momentum.
It added that the composition of growth has become increasingly favourable for creditworthiness. Private investment has acted as the main driver of Greece’s economic recovery over the past six years, reducing a long-standing investment gap and raising the investment-to-GDP ratio from roughly 11 per cent to about 16 per cent in 2024, with further improvement expected in 2025.
Moody’s said the stable outlook reflects its view that Greece’s current strong fiscal performance will likely moderate over time, although the country’s debt burden will continue to decline.
The agency also noted that several structural credit challenges will improve gradually, supported by Greece’s stable institutional and political environment.
However, it warned that completing institutional reforms and structural economic measures that support growth will take time. Moody’s also expects economic growth to slow once funds from the European Union Recovery and Resilience Facility are fully absorbed.
Despite the significant progress achieved in recent years, the agency said Greece’s debt levels are likely to remain among the highest of all rated countries through the end of the decade.
