By Athanasios Adamopoulos

 

Greek economic outlook remains positive with expectations over economic trends in the country in 2023 and 2024 improving steadily.

 

Only a few weeks after the IMF and the European Commission raised their estimates for the Greek economy, in sharp contrast with their decisions to cut estimates over the European Union and the Eurozone economy in the 2023-2024 period, Standard & Poor's announced it was raising the country's outlook to positive from stable, although it refrained from upgrading the country's credit rating to the investment grade citing the uncertainty related with the outcome of the general elections due on May 21 and the possibility of another round of elections if the first vote failed to lead to the formation of a government. The credit rating agency revised downwards its macro-economic estimates with energy supply disruptions in Europe further clouding the outlook. Greece is not “immune” to the economic slowdown and S&P estimates that economic growth will slow to 1.4% in 2023, however it will remain above that of its European peers. This is partly due to the positive effects of EU’s NextGeneration economic recovery package.

 

Shortly afterwards, S&P announced it was raising the credit ratings and the outlook of major Greek banks. The credit rating agency, in a report said this decision was based on the significant progress achieved by the financial institutions in terms of improving their balance sheets, reducing the stock of non-performing loans, boosting profitability and benefiting from higher interest rates.

 

More specifically, S&P raised:

 

- National Bank's and Eurobank's credit rating to BB+ from B+ and kept their outlook positive

 

- Alpha Bank's credit rating to BB- from B+ with stable outlook

 

- Piraeus Bank's credit rating to B+ from B with positive outlook

 

- Aegean Baltic Bank to B+ from B with stable outlook

 

- Eurobank Holdings to B from B- with positive outlook

 

- Alpha Services and Holdings to B from B- with stable outlook

 

- Piraeus Financial Holdings outlook to positive from stable.

 

In an announcement, the credit rating agency said Greek and Cypriot banks will benefit more after a multi-year restructuring of their balance sheets, from restoring profitability and higher interest rates. It added that these banks have made significant progress towards balancing their financial profiles, thanks to strong deposit base and a big leverage of balance sheets which brings them to a comfortable position to repay long-term loans taken from the European Central Bank.