The upgrades of the Greek economy show market confidence

The significant move of the S&P Global Ratings to upgrade Greece's credit rating one notch on Friday reflect the positive trajectory of the Greek economy and its market confidence.

Estimates show that the Public Debt Management Agency is considering the issuance of a short-term bond of about 2-3 billion euros, although the re-opening of a 10-year bond, issued in January, is not excluded.

Positive Signals

The latest news is also quite positive. Following the lowest deficit announced by Eurostat by about 2% of GDP in 2021, the Greek economy is experiencing its second consecutive upgrade this year. Prior to S&P ratings, it had preceded in March that of the rating agency DBRS Morningstar to BB high.

Moody's, which should asses Greece, had not made any announcement yet, leaving its ratings for later on. Fitch had also upgraded Greece in January to positive prospects ("BB").

This good news helped the Public Debt Management Agency to strengthen the return of Greece to international capital markets, something that hasn't happended the last years due to the general high yields on bonds. Αs originally scheduled, Greece had planned to issue securities worth 12 billion euros in 2022. JP Morgan analysts offer a chance for Greece to enter the markets with a five-year or seven-year bond issue. The US bank estimates that the spreads of Greek ten-year bonds compared to German bonds will be lower than the current difference of 201 points.

Strong cash cushion

What foreign firms recognize, among other things, is that Greece "built" a strong cash cushion with last year's cheap borrowing as its main source. This safety net currently reaches 40 billion euros. The financial team sends a safety signal as Greece is assured even in the...

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