A recent analysis by Fitch Solutions regarding the impacts of a broader war in the Middle East on the economies of various countries reveals that Greece’s economy is quite exposed to a potential escalation in the region.
Describing the risks stemming from the Middle East and North Africa (MENA) region, the Fitch’s BMI report highlights that net oil imports from the region amount to 6.9% of its GDP, and energy accounts for 8.2% of the Consumer Price Index basket. It further stresses that Greece’s high public debt, exacerbates its vulnerability to economic disruptions related to oil supply and price fluctuations.
Data shows that Greece’s dependence on Middle Eastern oil is the highest among developed economies, as is its reliance on exports to the Middle East and North African region.
What is more, the agency also ranks Greece among the top 10 developed countries’ economies most at risk to potential disruptions in transport through the Strait of Hormuz. Specifically the Greek economy is considered the sixth most exposed, with a score of 34.6 points.
Meanwhile Fitch has reassessed the likelihood of the conflict between Israel and Iran escalating into a full out war, which would have severe repercussions for the economies across the region. If the conflict persists for several months, its impact on real GDP growth in 2025 is expected to be significant.
Fitch Ratings currently assigns Greece a BBB- credit rating with a stable outlook, with the next assessment scheduled for Nov. 22. In its June report, it highlighted that this rating reflects Greece’s relatively high per capita income and strong governance indicators, both of which exceed the median for counties in the BBB category. The country’s membership in the EU and Eurozone also contributes to its policy stability.
However, these strengths are offset by the lingering effects of the public debt crisis, which includes high levels of public and external debt, as well as persistent vulnerabilities in the banking sector, despite declining unemployment and low medium-term growth potential.
