Japanese rating agency R&I has upgraded the outlook for the Greek economy from stable to positive.
The agency said it expects the economy to continue expanding steadily. It noted that the upgrade is considered highly positive given current international conditions.
R&I reported that the Greek economy is growing faster than the eurozone average, with real gross domestic product increasing by 2.1 percent in 2025.
R&I, or Rating and Investment Information, is a credit rating agency. The eurozone is the monetary union of European Union member states that have adopted the euro as their primary currency.
Economic drivers
The agency attributed the 2025 growth to private consumption supported by greater disposable income and tourism inflows. It also cited investment expansion driven by Foreign Direct Investment and the European Union Recovery and Resilience Facility.
For 2026, R&I said the main factors driving growth remain largely unchanged. However, the agency said real gross domestic product growth is likely to moderate compared to 2025.
Rising inflation and heightened tensions in the Middle East, alongside other factors, are weighing on the economy, the agency said. Despite this, R&I expects Greece to maintain a strong economic growth rate of almost 2 percent.
Banking and debt
From 2027 onwards, the agency expects the country to maintain economic growth in the 1 percent range. R&I noted the government aims to reduce its economic reliance on tourism by attracting and developing new industrial investments.
The stability of the financial sector has strengthened due to progress in reducing non-performing loans, the agency said. R&I reported that a government guarantee scheme has helped bring the banking sector ratio of non-performing loans close to the eurozone average.
The banking sector has improved its liquidity through an increase in domestic deposits, the agency said. It added that share capital is being kept at a stable level.
Fiscal performance
The current account balance shows a deficit of about 6 percent of gross domestic product, driven by a significant trade deficit. However, the agency said this large deficit also reflects increased imports linked to strong investments.
R&I said it does not view the current account deficit as a risk factor at this juncture. The agency noted that past twin deficits have been resolved, and foreign direct investment finances a portion of the current shortfall.
The agency said a surplus in the services balance, focused on tourism revenues, partly offsets the current account deficit.
Surplus and debt ratios
Regarding the general government fiscal balance, R&I reported a surplus since 2024. The agency said the primary surplus exceeds 4 percent of gross domestic product and is predicted to remain steadily positive in the coming years.
The government is collecting more revenue through measures aimed at combating tax evasion and avoidance, the agency said. These include mandatory electronic payments, tax digitization, and the adoption of the digital labor card.
The general government debt to gross domestic product ratio is on a downward trend, according to R&I. The agency said structural reforms aimed at securing tax revenues have helped the primary balance maintain significant surpluses, further decreasing general government debt.
The agency predicts the debt ratio will continuously decrease and that Greece will maintain a good borrowing capacity. It said further improvement in the fiscal situation can be expected, partly because European Union fiscal rules will limit expenditure growth.
R&I stated that the credit rating will increase if it confirms that the next government continues efforts toward economic revitalization and fiscal stabilization. The agency noted that the next elections are scheduled for July 2027.
