Greek Public Debt Sustainability: Progress and Persistent Risks
Greece’s public debt is
Greek Public Debt Sustainability: Progress and Persistent Risks
Greece’s public debt is falling as a percentage of gross domestic product, continuing a multi-year trend of fiscal consolidation. Yet the country still holds the highest debt-to-GDP rgratio in Europe, and that distinction may remain unchanged through 2036, according to the latest European Commission debt sustainability report.
The headline numbers show improvement. The underlying risks, however, tell a more complicated story.
While short- and long-term risks are assessed as low, medium-term risks remain elevated. The reasons include the size of Greece’s outstanding debt, the long maturity profile of its loans, future repayments to the European Stability Mechanism and the European Financial Stability Facility, and the economy’s sensitivity to external shocks.
In a period marked by global economic uncertainty, those vulnerabilities matter.
Why the Size of Greek Public Debt Still Matters
Even under the baseline debt sustainability scenario, Greece’s public debt is expected to decline but remain high in the medium term, reaching around 124% of GDP by 2036.
That projection assumes that Greece will maintain
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