Bond outlook. French bank Societe Generale advises Greek bond investors to wait until the second half of 2023, as a strong rally in Greek government bonds is expected to begin during that period, when Greece regains investment grade and its market experiences Portugal’s euphoria when it returned to investment grade in 2017. [REUTERS]
Political stability in Greece is high on the radar of international firms in view of the 2027 national elections and is once again becoming a crucial factor for markets, ratings and, more generally, investors’ perception of this country.
Analysts and institutions point out that the story of strong economic performance, in order to continue, requires a political setting that allows for the consistent implementation of reforms, strengthens the credibility of economic policy and has the reflexes to be able to manage potential crises, thus maintaining market confidence.
As Societe Generale emphasizes, the country’s strong economic performance is not enough. “Greece is on the right track and is heading towards a further reduction in public debt in the medium term, supported by GDP growth. Although the level of debt remains high, its favorable profile significantly reduces interest rate risks,” the French bank notes in a new analysis. However, “the 2027 parliamentary elections will determine the direction of policies for the coming years. So, while Greece is on the right track, it needs policy consistency over time and not just strong economic performance,” it says.
