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Sovereign credit ratings and the fundamentals of the Greek economy


  • Dimitris Malliaropulos

    (Bank of Greece)

  • Petros Migiakis

    (Bank of Greece)


We discuss the factors behind sovereign credit ratings and reproduce their quantitative compo-nent, focusing on the case of Greece. The sovereign credit rating of Greece is still lower than the investment grade threshold. However, some of the fundamentals of the Greek economy are shown to be better than the average of the rating category it belongs to at present (BB) and better even than higher rating categories. Based on the reproduction of the score component of sovereign credit ratings of the three major Credit Rating Agencies, we show that an improvement in the institu-tional factors of the Greek economy to the level of the early 2000s can lead to a significant increase in Greece’s score, thus contributing to an upgrade to the investment grade category.

Suggested Citation

  • Dimitris Malliaropulos & Petros Migiakis, 2020. "Sovereign credit ratings and the fundamentals of the Greek economy," Economic Bulletin, Bank of Greece, issue 51, pages 1-30, July.
  • Handle: RePEc:bog:econbl:y:2020:i:51:p:43-72

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    More about this item


    credit ratings; sovereign risk; Greek economy; institutions; governance indicators;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt


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