Greece is just one step away from gaining investment grade and must now focus all its efforts on achieving this goal, Bank of Greece governor Yannis Stournaras said in a meeting with Parliament President Konstantinos Tassoulas on Thursday, during which he delivered the central bank's Annual Monetary Policy Report 2021-2022 to the Hellenic Parliament.
Both Stournaras and Tassoulas agreed on the importance of achieving investment grade, which will open the way for Greece to borrow at lower rates from international markets.
"The Greek economy, amid all this noise and confusuion, has now officially emerged from enhanced surveillance. This comes to an end next month but we have also come very close to investment grade which will open up the way to much cheaper borrowing, which our economy needs," Tassoulas said.
Stournaras said that achieving investment grade must be a national goal, as the European Central Bank will be raising interest rates from July in order to counteract inflation, which meant that the cost of money will increase. Achieving investment grade would greatly offset this increased cost, he added.
The central banker was upbeat about the Greek economy's growth prospects once the war in Ukraine is over and energy prices start to fall, while noting that even in the worst-case scenario, Greece was not forecast to experience a recession in the next three years. He said this was as a result of revenues from tourism but also accumulated savings during the pandemic, state assistance amounting to 36 billion euros, as well as some 70 billion euros flowing in from the Recovery and Resilience Fund and EU programmes. Apart from this, he added, the public debt now manageable and had a very low average interest rate, while the banking system was to a great extent reformed.