UBS Positive Outlook on Greece, Sees Moody’s Upgrade

Multinational investment bank UBS sees the combination of fiscal resilience and a shortage of titles as an appealing entry point for investors into the Greek bond market. Its analysis estimates that a 3.5% yield is an optimal investment opportunity.

UBS’s positive outlook for the Greek economy is founded primarily on four main components:

UBS forecasts a 2.8% GDP growth rate for Greece in 2025, the highest among major Eurozone economies and 70 basis points above the consensus estimate. This growth is expected to be fueled by a significant increase in disbursements from the Recovery and Resilience Facility (RRF) grants and loans to final recipients.

UBS forecasts Greece will comfortably reach its 2.5% primary fiscal surplus of GDP target for 2025, citing several factors:

Growth in net primary national expenditures is capped at 3.7%, below nominal GDP growth.
The government is expected to generate an additional €500 million in revenues from combating tax evasion, on top of €1.8 billion in 2024, thanks to minor reforms.

Greece’s ongoing efforts to refinance the costliest segments of its debt, including the early repayment of €17.8 billion in European GLF loans in 2024, are helping to keep overall debt servicing costs favorable. These actions also support a faster reduction in the country’s public debt burden.

UBS’s analysis underscores the robust fundamentals supporting Greece’s economic trajectory. A strong fiscal framework, strategic use of EU recovery funds, and proactive debt management efforts position the country for sustainable growth.

Moody’s remains the only one of the three major credit rating agencies that still rates Greece at Ba1, one notch below investment grade. Last year, Scope Ratings upgraded Greece to BBB, two notches above the investment-grade threshold.

Moody’s is scheduled to release its assessments of Greece on March 14 and September 19 of this year.

According to UBS, while a credit upgrade in March appears less likely, Greece’s return to investment grade by Moody’s is probable in the second half of 2025.