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UBS: Optimistic Outlook For Greece And Its Bonds In 2025

by THEFUTURE.TEAM

January 16, 2025

UBS maintains a bullish perspective on Greek bonds, citing favourable fiscal conditions, manageable refinancing needs, and the potential for further credit upgrades. With the outlook for 2025 looking strong, the Swiss financial institution highlights key factors driving its confidence in Greek government securities and the nation’s economic prospects.

Robust GDP Growth And Recovery Fund Support

UBS projects a 2.8% GDP growth rate for Greece in 2025, surpassing both major Eurozone economies and the region’s average by 70 basis points. This growth is expected to be fuelled by increased disbursements from the Recovery and Resilience Facility (RRF), which will reach 4% of GDP in 2025 compared to 2.3% in 2024. With Greece having secured 60% of its total RRF allocation—equivalent to 16% of its GDP—its recovery is less dependent on broader Eurozone dynamics.

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Primary Budget Surplus And Fiscal Strength

Greece is on track to achieve a primary budget surplus of 2.5% of GDP in 2025. UBS attributes this to:

Greece’s likely attainment of the same surplus level in 2024.
Controlled growth in primary expenditure (3.7%), remaining below nominal GDP growth.
An anticipated €500 million boost from anti-tax evasion reforms, following a €1.8 billion gain in 2024.

Debt Management And Refinancing Efforts

The Greek government continues to focus on refinancing its most expensive debt, including the early repayment of Greek Loan Facility (GLF) obligations. These measures have improved the overall cost of servicing public debt, enabling faster debt reduction and maintaining favourable conditions for bond investors.

Resilient Banking Sector

The Greek banking system has shown significant improvement, with non-performing exposures (NPEs) reduced to 4.6%—the lowest since 2002. Additionally, corporate lending has surged to an annual growth rate of 16% by December 2024, partly due to RRF funding.

Limited Financing Needs And Bond Scarcity

UBS highlights Greece’s reduced gross financing needs for 2025, projected at €8 billion—€1.5 billion lower than 2024. This decline reflects improved fiscal balances (-0.1% of GDP deficit in 2025) and lower debt maturities.

Despite a repricing of European bond yields, Greece’s recent 10-year bond issuance achieved record demand, covering 50% of its borrowing programme for 2025. UBS anticipates another issuance in Q2 2025, with a longer duration of 15–20 years. Additionally, the limited net supply of Greek bonds supports their performance.

The European Central Bank (ECB) holds €38 billion of Greek debt in its Pandemic Emergency Purchase Programme (PEPP) portfolio, comprising 43% of outstanding Greek bonds. With minimal drawdowns expected, Greek bonds will likely retain their scarcity-driven appeal.

Investment Grade Status And Moody’s Prospects

Greece’s return to investment grade in 2024 significantly bolstered its bond market, enabling inclusion in the Bloomberg Euro Aggregate Treasury Bond Index, where it now holds a 1% share. Moody’s and S&P both upgraded Greece’s outlook to positive in late 2024, and UBS foresees Moody’s raising Greece to investment grade in September 2025, further enhancing investor confidence.

UBS’s positive stance on Greek bonds reflects Greece’s robust economic performance, effective fiscal management, and improved credit profile. With strategic debt refinancing, reduced financing needs, and a resilient banking sector, Greece is poised to maintain its upward trajectory in 2025. The nation’s ability to leverage RRF funding and achieve further credit upgrades will be instrumental in shaping its financial future and securing its position as an attractive investment destination.

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Cyprus Income Distribution 2024: An In-Depth Breakdown of Economic Classes

by THEFUTURE.TEAM

December 24, 2025

New findings from the Cyprus Statistical Service offer a comprehensive analysis of the nation’s income stratification in 2024. The report, titled Population By Income Class, provides critical insights into the proportions of the population that fall within the middle, upper, and lower income brackets, as well as those at risk of poverty.

Income Distribution Overview

The data for 2024 show that 64.6% of the population falls within the middle income class – a modest increase from 63% in 2011. However, it is noteworthy that the range for this class begins at a comparatively low threshold of €15,501. Meanwhile, 27.8% of the population continues to reside in the lower income bracket (a figure largely unchanged from 27.7% in 2011), with nearly 14.6% of these individuals identified as at risk of poverty. The upper income class accounted for 7.6% of the population, a slight decline from 9.1% in 2011.

Income Brackets And Their Thresholds

According to the report, the median equivalent disposable national income reached €20,666 in 2024. The upper limit of the lower income class was established at €15,500, and the threshold for poverty risk was set at €12,400. The middle income category spans from €15,501 to €41,332, while any household earning over €41,333 is classified in the upper income class. The median equivalents for each group were reported at €12,271 for the lower, €23,517 for the middle, and €51,316 for the upper income classes.

Methodological Insights And Comparative Findings

Employing the methodology recommended by the Organisation for Economic Co-operation and Development (OECD), the report defines the middle income class as households earning between 75% and 200% of the national median income. In contrast, incomes exceeding 200% of the median classify households as upper income, while those earning below 75% fall into the lower income category.

Detailed Findings Across Income Segments

Upper Income Class: Comprising 73,055 individuals (7.6% of the population), this group had a median equivalent disposable income of €51,136. Notably, the share of individuals in this category has contracted since 2011.
Upper Middle Income Segment: This subgroup includes 112,694 people (11.7% of the population) with a median income of €34,961. Combined with the upper income class, they represent 185,749 individuals.
Middle Income Group: Encompassing 30.3% of the population (approximately 294,624 individuals), this segment reports a median disposable income of €24,975.
Lower Middle And Lower Income Classes: The lower middle income category includes 22.2% of the population (211,768 individuals) with a median income of €17,800, while the lower income class accounts for 27.8% (267,557 individuals) with a median income of €12,271.

Payment Behaviors And Economic Implications

The report also examines how income levels influence repayment behavior for primary residence loans or rental payments. Historically, households in the lower income class have experienced the greatest delays. In 2024, 27.0% of those in the lower income bracket were late on payments—a significant improvement from 34.6% in 2011. For the middle income class, late payments were observed in 9.9% of cases, down from 21.4% in 2011. Among the upper income class, only 3% experienced delays, compared to 9.9% previously.

This detailed analysis underscores shifts in income distribution and repayment behavior across Cyprus, reflecting broader economic trends that are critical for policymakers and investors to consider as they navigate the evolving financial landscape.