She considers it possible Goldman Sachs an investment-grade recovery scenario for the Greek economy on April 21, according to S&P, despite the fact that Greece is officially in the pre-election period.

According to the report, Prime Minister Ms. Mitsotakis announced yesterday that the elections will take place on 21 May.after weeks of political turmoil due to a major rail disaster on 28 February. The US Bank cites opinion polls that show ND is in the lead, while it believes a second round is likely to be needed in early July, potentially leading to a coalition government led by New Democracy and dependent on PASOK support.

In the same time, the Greek economy is well positioned to improve prospects and possibly be upgraded to investment grade by the S&P on April 21st.. If recent European financial tensions do not worsen beyond our expectations, Greece will remain relatively resilient on positive private credit growth, continued recovery in capital accumulation and an improving debt-to-GDP ratio that is still on a downward trajectory and amid rising debt costs, notes Goldman Sachs .

Greece remains relatively resilient, he notes, thanks to an increase in private credit to the real economy, which is showing a clear increase in 2022 after 10 years of decline. Credit growth supported the latest phase of investment recovery (+14.7% in 2022). Then, according to Goldman, investment growth could also benefit from the support of the Recovery Fund, which in the case of Greece is about 17% of GDP and runs until 2026. outlook, Greek economy remains on solid footing, according to US bank

Though her tightening cycle ECB is fueling higher yields, and the cost of government debt will rise overall in the coming years, Goldman Sachs sees Greece’s debt as less vulnerable than other countries’ debt. This is due to two main reasons. The first is the extended weighted duration of Greek debt (17.5 years) thanks to European bailouts (EFSF, ESM, EIB, SURE and NGEU). Secondly, an increase in nominal growth, which is expected to remain around 4% through 2024, and a cautious fiscal outlook that sees the primary balance continue to expand in 2023 and 2024.

Source: Money Review.