European ratings agency Scope is expected to release its assessment of the Greek economy tomorrow, December 6, after its last upgrade to a “positive” outlook in July.
Tomorrow’s assessment of the Greek economy by Scope will focus on the reduction of public debt, improvements in the resilience of the Greek banking system, and structural reforms, balanced against the country’s still high public debt and a history of economic crises.
The baseline scenario assumes that primary budget surpluses will be maintained in the coming years, supporting Greece’s credit rating trajectory.
Additionally, Greece’s general government debt-to-GDP ratio is projected to decline to 145% by the end of next year and further to 132% by 2029, down from an estimated 155.3% by the end of 2024. If achieved, the 2029 ratio could represent Greece’s lowest debt-to-GDP level since the 2010 debt crisis and could fall below Italy’s (rated BBB+) by 2027.
However, Scope notes it is monitoring signs of further strengthening of capital adequacy across the banking system, reduced interdependence between banks and the state, and whether the government can address the gradual weakening of public debt structure.
Greece is more reliant on market financing rather than official-sector loans on favorable terms, and it is prepaying bailout loans as part of the European Central Bank’s tightening monetary policy, Scope notes.
The European ratings agency draws attention to the anticipated policy shifts in the United States following Donald Trump’s re-election to the presidency, warning they might have significant implications for the U.S. credit trajectory and countries worldwide.
The analysis points out that the countries most vulnerable to possible shifts in the policies by the new U.S. government are the ones with large trade surpluses with the U.S. and/or significant exports to the U.S. (such as China, Germany, Japan, and Ireland).
In addition, those with high levels of dollar-denominated debt (emerging markets like Ukraine, Egypt, and Turkey), and those heavily reliant on U.S. military assistance, especially amid ongoing geopolitical tensions with Russia (notably Ukraine and Georgia) are likely to be impacted by Trump’s policies.
This dynamic could exacerbate credit risks, reshaping sovereign risk profiles globally.