Scope Ratings GmbH (Scope) monitors and reviews its credit ratings on an ongoing basis and at least annually, or every six months in the cases of sovereigns, sub-sovereigns and supranational organisations that may act as a lender of last resort.

Scope performs monitoring reviews to determine whether material changes and/or changes in macro-economic or financial-market conditions could have an impact on the credit ratings. Scope considers all available and relevant information when undertaking the monitoring review.

Monitoring reviews are conducted by performing a peer comparison, benchmarking against the rating-change drivers, and/or reviewing the credit rating’s performance over time, as deemed appropriate by the Lead Analyst or Analytical Team Head, in addition to an assessment of all aspects of the relevant methodology/ies, including key rating assumptions and model(s). Scope announces the result of each monitoring review on its website and/or on its subscription platform ScopeOne.

Scope completed the monitoring review for the Hellenic Republic (long-term local- and foreign-currency issuer and senior unsecured debt ratings: BBB/Stable; short-term local- and foreign-currency issuer ratings: S-2/Stable) on 27 May 2025.

This monitoring note does not constitute a credit-rating action, nor does it indicate the likelihood that Scope will conduct a credit-rating action in the short term. Information about the latest credit-rating action connected with this monitoring note along with the associated ratings history can be found on scoperatings.com.

Key rating factors

For the updated rating report accompanying this review, please see here.

The Hellenic Republic’s BBB/Stable credit rating is supported by: i) strong European institutional support, with Eurosystem and the EU providing a monetary and policy backstop; ii) strengthening fiscal fundamentals, supported by primary surpluses, improved revenue performance, enabling a sustained decline in the public debt ratio; and iii) a favourable debt profile. Greece’s high share of long-term, low-interest debt, predominantly held by official-sector creditors, together with its significant cash buffer, supports the government’s debt-servicing capacity and mitigates the impact from potential market volatility and interest rate shocks.

Rating challenges include: i) a very high public debt stock, which remains a long-term vulnerability despite a declining trajectory; ii) persistent vulnerabilities in the banking sector, including moderate capital buffers, legacy asset-quality concerns, and a strong sovereign-bank nexus that increases financial sector exposure to government risk; and iii) structural constraints on medium-term growth, such as weak productivity, adverse demographics, and limited economic diversification.

Greece's economy grew by 2.3% in 2024, driven by investment and private consumption. Scope expects growth to ease to 2.1% in 2025 and 1.8% in 2026 as investment momentum slows, though consumption remains resilient. Labour shortages and sticky services inflation present challenges, while ongoing digital and administrative reforms are enhancing the investment environment.

Structural rigidities and external imbalances persist, with the net international investment position estimated at -140% of GDP in 2024 despite gradual improvement. The current account deficit widened to 6.4% of GDP in 2024, reflecting import-heavy investment, rising interest payments, and low household savings, and is expected to stay elevated. Despite improvements in capital adequacy, profitability, asset quality, and governance, Greek banks remain structurally vulnerable due to high reliance on deferred tax credits (DTCs) and high sovereign exposure.

Fiscal performance remains strong, with a 4% primary surplus and 1.3% overall surplus in 2024. Planned primary surpluses of 2.5% in 2025 and 2.4% in 2026 support a projected debt decline to 125% of GDP by 2030. Greece’s debt structure is favourable, with long maturities, low interest costs, full fixed-rate coverage, and a large cash buffer of EUR 42bn in May 2025, keeping refinancing risks well contained.

The Stable Outlook reflects Scope’s view that risks to the ratings are balanced over the next 12 to 18 months.

Upside scenarios for the ratings and Outlooks are (individually or collectively):

1. Sustained and material reduction in the public-debt ratio;
    
2. Improved medium-term growth prospects, enhanced economic and external resilience;
    
3. Further mitigation of banking-sector vulnerabilities, reinforcing financial stability.

Downside scenarios for the ratings and Outlooks are (individually or collectively):

1. Stalling or reversal in public debt reduction;
    
2. Banking sector risks re-intensify, undermining financial system stability;
    
3. Erosion of macroeconomic resilience, including material weakening of external metrics.

The methodology applicable for the reviewed ratings and/or rating Outlooks (Sovereign Rating Methodology, 27 January 2025) is available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst: Jakob Suwalski, Executive Director

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