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UBS: Optimistic Outlook For Greece And Its Bonds In 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.

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.

TikTok Returns To US App Stores 

TikTok is once again available for download in the Apple and Google app stores in the US, following a delay in the enforcement of its ban by former President Donald Trump. The ban’s postponement until April 5 gives the administration additional time to evaluate the situation.

Key Developments

The decision to restore TikTok access came after Google and Apple received reassurances from the Trump administration that they would not face legal consequences for reinstating the Chinese-owned app. According to Bloomberg, US Attorney General Pam Bondi sent a letter outlining these guarantees.

In an executive order signed on January 20, Trump instructed the attorney general not to take enforcement action for 75 days, providing time for his administration to determine how to proceed.

Uncertain Future For TikTok In The US

While TikTok is back on the US app stores, its long-term survival remains uncertain. If no deal is reached by early April to address national security concerns, the app may face another shutdown. ByteDance, the parent company, has insisted that TikTok is not for sale.

Legislation And Pressure On ByteDance

The Protecting Americans from Foreign Enemy-Controlled Apps Act, which passed with bipartisan support in Congress, mandates a nationwide ban on TikTok unless ByteDance sells its US operations. This law was signed by President Joe Biden in April of last year.

In late January, the app was briefly removed from US stores following the ban’s activation, impacting over 170 million American users. However, TikTok was restored soon after, following Trump’s intervention in his first hours as president. During that time, he signed an executive order allowing 75 days for a deal that would safeguard national security. Trump also suggested that the US could take a 50% stake in TikTok, a move he believed would keep the app “in good hands.”

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