Greece now expects a larger surplus for this year than it previously penciled in, according to a draft fiscal plan sent to parliament on Monday. The blueprint calls for a 2026 surplus equal to 0.6% of GDP, topping the goal set earlier in the year.
If that outcome lands, 2026 would be the third consecutive year with the budget in positive territory, and the path continues in 2027 with a surplus of 0.3% of GDP. Greece is also among just four countries in Europe anticipated to post a surplus in the current year.
Investors are noticing the fiscal turn. Greece's borrowing costs now sit below those of larger peers such as France and Italy. Ratings momentum has followed: in September, Moody's Ratings shifted Greece's outlook to positive, and Scope Ratings raised the sovereign to just one notch shy of an A category.
Paying down debt early is a confidence signal most governments are in no position to send. Market Briefs covers sovereign finances free every weekday.
Healthier public finances are giving the government room to act. Athens plans to pay back close to €13 billion ($14.6 billion) of debt ahead of time. That supports a decline in the debt ratio to 136.7% of GDP this year, which leaves Italy as Europe's most indebted country, with a further slide to 128.8% projected for 2027. On the growth front, the economy is seen expanding 2% in 2026 and quickening to 2.3% in 2027.
Lower funding costs paired with steady surpluses make rollovers less stressful, and prepaying debt can trim interest bills over time. If growth at 2% in 2026 and 2.3% in 2027 materializes, the mix of improving credit signals and a falling debt load could keep Greece's story on sturdier ground for ordinary investors watching risk and return.
Greece's turnaround moves borrowing costs across the European periphery. Join Market Briefs free and track the shift.
