JP Morgan Affirms Confidence in Greek Bonds, Economy Steady

JP Morgan has reiterated its recommendation for investors to maintain a long position in Greek bonds, affirming its optimistic view on Greece’s financial assets. The firm continues to stand by its economic forecast for Greece, predicting a growth rate of 2.2% for the current year.

Since November 2023, the firm has consistently expressed confidence, particularly in bonds maturing in 2033.

Greece is scheduled to hold its monthly auction of Greek bonds on June 19, with details set to be announced today, June 18, as per the auction calendar. The Public Debt Management Agency plans to conduct regular monthly auctions, each targeting approximately 300 million euros.

In terms of the Greek spread, which measures the yield differential between Greek and German 10-year bonds, JP Morgan foresees a contraction to 105 basis points by September, though it expects the spread to settle around 115 basis points by year-end.

JP Morgan’s economic forecasts for Greece remain steady, projecting growth of 2.2% for the year alongside inflation at 2.8%. The firm also predicts that the unemployment rate will hold steady at 12.1%.

Furthermore, JP Morgan notes Greece’s primary surplus of 2.3% and the government’s plans for early debt repayments, which are expected to reduce the debt-to-GDP ratio to 154%. However, the estimated current account deficit of 5.2% presents a notable concern.