China: two major rating agencies assign Greece investment grade

Lianhe Credit and China Chengxin Credit Rating Group increased Greece’s credit rating. The agencies’ report noted that the government’s ability to control finances has been steadily improving, with significant reductions in the budget deficit and debt burden.

One of the largest Chinese rating agencies, Lianhe Credit, today upgraded Greece’s long-term credit rating from BBB- to investment grade BBB with a stable outlook. The rating upgrade came a day after another major Chinese rating agency upgraded the Greek economy. China Chengxin Credit Rating Group has upgraded Greece’s credit rating from B- to BB+ with a stable outlook.

Both rating agencies have upgraded Greece’s credit rating for the following reasons. In 2022, thanks to financial assistance EU, the Greek government’s structural reforms, the recovery of international tourism, etc., the Greek economy has recovered strongly, with economic growth rates above the Eurozone average and expected to continue its strong growth into 2023. As noted in the assessments, the Greek government continues to implement reforms in various areas and its ability to control finances is steadily improving, significantly reducing the budget deficit and debt burden.

In addition, it is noted that sufficient levels of bank liquidity and continued improvement in the quality of banks’ assets ensure stable profitability, and the non-performing loan ratio has dropped to its lowest level in almost 12 years. In addition, there has been a significant improvement in the situation in the Greek labor market: the unemployment rate has dropped to a new record low since 2009, and GDP per capita exceeded $20 thousand. It is noted that in June 2023, the New Democracy party won an overwhelming victory in the elections , which will allow for a smooth change of government and ensure the continuation of the policy of restructuring the economy and budget of Greece.

The upgrade of Greece’s sovereign credit rating by two major Chinese rating agencies reflects Chinese confidence in the improving economic situation in Greece, reducing banking risks, macroeconomic growth prospects and the pace of reforms.

Finally, the report expresses confidence that raising Greece’s credit rating to investment grade will help attract more Chinese investors to the Greek market and further unlock the potential of Sino-Greek economic and trade cooperation.

As Athens News previously reported, investment ratings were assigned to Greece by the Japanese rating agency Rating and Investment Information (R&I)and Standard&Poor’s Global Ratings (S&P). Greece is expected to receive an investment grade rating from Moody’s in the near future.

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