The rapid reduction of public debt, based on the high fiscal performance of the Greek economy and high growth rates, is the country’s strong card in the bid for new upgrades from foreign rating agencies.
According to all forecasts, Greece is expected to end a long-term negative cycle in terms of the level of public debt by the end of the year. It will no longer be the country with the highest debt as a percentage of GDP in Europe. Greece’s public debt after the latest revision is expected to fall significantly again to 136.8% of GDP in 2026, making it lower than Italy’s projected 138.6% of GDP. This is a new consecutive dip in public debt from the 2025 level of 145.9% and a further reduction is projected for 2027 to 130.3% of GDP, to reach 119% of GDP in 2029 ( i.e. below the critical 120% threshold)
This picture reflects the fastest deceleration of public debt of any economy in the last 40 years, Prime Minister Kyriakos Mitsotakis said at the last cabinet meeting. And it is a record for Greece, which is highlighted in all the latest reports by international rating agencies. On May 8, the first round of this year’s rating by foreign agencies is expected to close with the publication of the Fitch report. This will be followed by the second round from September to November 2026, when the government expects to achieve new upgrades in the credit rating of the Greek economy, provided of course that geopolitical developments related to the turn of the war in the Middle East allow it.
Note that two early repayments of the public debt incurred during the memorandum period are scheduled for this year. Specifically, 7 billion euros of the 52.9 billion euro loan that Greece signed with eurozone countries will be repaid in the summer.
A key factor, apart from high growth rates, for the large reduction in public debt is the country’s fiscal performance in recent years. The primary surplus in 2025 has been exceeded again compared to the original target. It reached 4.9% of GDP against a target of 3.7% of GDP, while this year, based on the new revised projections, it is projected to rise to 3.2% of GDP against an initial forecast of 2.8%. For another year, 2025, the contribution of revenues from the fight against tax evasion was important for the strong primary surplus. In particular, it is estimated that last year the additional revenue from the fight against tax evasion amounted to €3 billion, while in 2024 it amounted to €2 billion, making a decisive contribution to the increase in the primary surplus to 4.7% of GDP.
