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Country Risk Service Greece 2nd Quarter Updater

  • ID: 5025062
  • Country Profile
  • May 2020
  • Region: Greece
  • 19 Pages
  • The Economist Intelligence Unit
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The Economist Intelligence Unit's sovereign risk rating stands at B, reflecting high levels of public debt and significant fiscal policy challenges, which will be exacerbated by the severe economic impact of the coronavirus pandemic. However, there has been a decline in political risk following the election of a majority, centre-right government in July 2019 and improvements in the economic policy framework. Furthermore, the European Central Bank has eased its collateral conditions, helping to contain Greek government borrowing costs.

The currency risk rating is at A, but a worsening external environment and tighter short-term funding conditions are putting pressure on the currency. The rating is supported by the euro zone's economic and institutional framework. Structural support for the euro also comes from a large regional current-account surplus.

The rating is at BB, mainly reflecting Greek banks' low profitability and high level of non-performing loans (NPLs), at 42.1% of total loans as at end-September 2019. With the economy expected to contract sharply in 2020, many businesses will struggle to survive, increasing banks' exposure to loan defaults.
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Country Risk Service Greece 2nd Quarter Updater

Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk

Definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk

Central scenario for 2020-24: Political stability

Central scenario for 2020-24: Election watch

Central scenario for 2020-24: International relations

Central scenario for 2020-24: Policy trends

Central scenario for 2020-24: Fiscal policy

Central scenario for 2020-24: Monetary policy

Central scenario for 2020-24: Economic growth

Central scenario for 2020-24: Inflation

Central scenario for 2020-24: Exchange rates

Central scenario for 2020-24: External sector

Key risk indicators

Ratings summary

Quarterly indicators

International assumptions summary

Economic structure

Public finances

Exchange rates, interest rates and prices

Financial sector

Current account

Foreign payment and liquidity indicators

External trade
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