Fitch affirmed the BB rating for Greece, maintained a positive outlook

Fitch maintained Greece's credit rating two notches below investment grade, maintaining the positive outlook.

As Fitch explains in the report justifying its decision, the high debt and non-performing loans offset the positive elements that would justify an upgrade.

Structural Indicators, Debt Levels: Greece has income per capita that far exceeds the 'BB' and 'BBB' medians. Governance scores and human development indicators are among the highest of sub-investment grade peers. These strengths are set against the legacies of the sovereign debt crisis, which include large stocks of public and external debt, and a still high, albeit rapidly declining, level of non-performing loans (NPLs). The Positive Outlook reflects an expected decline in public sector indebtedness, in the context of still low average borrowing costs, and a degree of expected resilience of the Greek economy, despite the worsening of the economic outlook for the eurozone in recent months.

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Public Debt Levels, Mitigants: Fitch's public finance projections point to a steady decline of the government debt/GDP ratio through 2024. We expect the debt ratio to fall to 175.4% by end-2022, below its pre-pandemic level and down from 193.3% at end-2021. The debt ratio will then edge down to 174.4%, before reaching 170.4% at end-2024, as the primary budget balance returns to surplus. The debt ratio in 2024 is still forecast to be among the highest of Fitch-rated sovereigns, and more than 3x the 'BB' median.

At the same time, there are mitigating factors that support debt sustainability. Greece's liquid asset buffer is substantial (forecast to be close to 17% of GDP at year-end). The concessional nature of the majority of Greek sovereign...