JP Morgan: The investment level for Greece is possible until 2023
Thursday 6 January 2022, 00:00
JP Morgan sees a high probability of upgrading Greece’s debt in 2022, estimating that it may return to the investment level this year or at the beginning of 2023 at the latest.
“In our opinion, the most interesting in the first half of 2022 are February 18 (France-Fitch and Cyprus-Moody’s), April 1 (Italy-Moody’s), April 22 (Italy-S & P) and all house revaluations for Greece (January 14-Fitch, March 18-Moody’s and DBRS and April 22-S & P “.
In general, JP Morgan predicts that the upgrades will continue in 2022, especially for the smaller countries with a good chance that Greece will regain the information level by the end of 2022 or the beginning of 2023.
The past year has seen limited moves for eurozone sovereign debt issuers. The rating agencies have upgraded the outlook and rating of a few countries in the so-called eurozone region.
“Our baseline scenario wants the positive ratings to continue in 2022, especially with regard to smaller debt issuers, with the possibility of Greece returning to the next level by the end of 2022 in early 2023. We also see room for data upgrades for Italy. “reforms and a stable political environment,” the report said. “For 2022, the scales are leaning towards upgrades, mainly in the periphery of the eurozone.”
In 2021, rating agencies upgraded the prospects of a few eurozone countries. Cyprus, Greece, Portugal and Italy saw upgrades in their rankings in 2021.
How is the rating today:
JP Morgan estimates that the macroeconomic outlook is positive and the political environment is stable. The spread between the euro area countries will remain within the euro in 2022 despite the reduction of support from the European Central Bank.
“We see a high probability of upgrading countries with low scores such as Cyprus and Greece in particular. Apart from these, we see a limited margin for upgrades in other countries. We give 50% chance of upgrade only for Ireland from Moody’s “.
In Greece, the reform agenda, the stimulus from the resources of the Recovery Fund and the stable political environment will maintain the positive dynamics of the country’s debt rating and there is a good chance of recovering the investment grade from at least one house by the end of 2022 or the beginning. . of 2023.
“In Italy, following the recent moves by rating agencies and based on our scenario of political stability, we see room for upgrades in 2022, most likely Moody’s, at least upgrading the outlook by two firms.”