Greece is entering a critical stretch of sovereign credit reviews this spring. The first assessment of 2026 is due Friday from the Canadian rating agency DBRS Morningstar and is arriving at a moment of heightened geopolitical tension and fresh uncertainty over energy prices.
The reviews come as conflict in the Middle East and the effective closure of the Strait of Hormuz have rattled global markets and raised the prospect of a new inflationary wave. For Greece, an economy that has only recently climbed back to investment-grade status after years of debt crisis, the timing is uncomfortable.
A Hard-Won Rating Under Scrutiny
DBRS upgraded Greece to “BBB” — the lower end of investment grade — in March of last year, and has since maintained a “stable” outlook on the country. Two more agencies are scheduled to weigh in later this month: Moody’s on March 13 and Scope on March 20. The reviews continue through spring and fall, with S&P due April 24, Fitch on May 8, and a second round beginning in September.
Greece’s return to investment grade was a milestone after the sovereign debt crisis that nearly drove the country out of the eurozone in the 2010s. But analysts caution that its ratings remain at the very bottom of the investment-grade spectrum, and no meaningful upgrades are expected this year — let alone a move toward an “A” grade.
The Oil Price Risk
Greece’s 2026 budget was built on an assumed average Brent crude price of $62.40 per barrel. With oil now threatening to exceed $100, the gap between that baseline and current market conditions represents a meaningful fiscal risk.
The government’s own sensitivity analysis, prepared during the budget process, maps out the consequences: if oil stays above $100 per barrel, private consumption would fall 0.7% below the base-case forecast, and investment would drop by 0.9%. Inflation, measured by the consumer price index, would surge to 4.7%; more than double the 2.2% projected in the base scenario.
Greece was already running inflation of around 3% in the first two months of this year, before the latest escalation in the Middle East.
The economy would slow in real terms, even as nominal GDP rose on the back of higher prices — a distinction that matters for debt sustainability. Government revenues would outpace spending growth, and the debt-to-GDP ratio would technically decline by 1.4 percentage points relative to the base case. But as the budget document itself acknowledges, that would be a nominal correction, not a genuine improvement in living standards.
Yannis Stournaras, the governor of the Bank of Greece has noted that the ultimate impact of the Iran-related crisis will depend heavily on how long the conflict lasts.
Structural Challenges the Agencies Won’t Ignore
Credit rating agencies assess more than short-term shocks. In previous reviews, the major agencies have consistently flagged a set of deeper, structural concerns about the Greek economy that are unlikely to disappear regardless of oil prices.
Greece continues to carry the highest public debt burden in the European Union, even as that debt is slowly declining as a share of GDP. Its current account deficit remains in negative territory, a persistent source of external vulnerability.
The productive base of the Greek economy is considered narrow, with a heavy reliance on services, particularly tourism. Labor market participation — especially among women and older workers — lags behind the EU average. Demographic trends compound the challenge: an aging population, falling birth rates, and the emigration of skilled young Greeks over the past decade have all eroded the country’s long-term growth potential.
The financial sector also continues to carry residual risks from the debt crisis era, and trade tensions globally could hit Greece indirectly through the external sector and financial flows.
Political Risk in the Mix
Rating agencies also factor in political stability. The current Greek government faces declining poll numbers and growing public discontent, with surveys suggesting it would struggle to win an outright parliamentary majority if elections were held today. Political uncertainty, even at a low level, adds a layer of risk that agencies incorporate into their assessments.
source: ot.gr
