The American investment bank makes a forecast for the investment grade of the Greek economy even in 2023 Morgan Stanley pwith reference to the Greek elections.

In particular, Morgan Stanley predicts that the Greek economy will reach the investment grade within the first half of 2024, while it does not rule out the possibility of a surprise and the investment grade even coming in in the second half of this year.

“Strong GDP growth and prudent public finances will deliver a primary surplus in 2023 and 2024. We believe that Greece will only reach investment grade in the first half of 2024, but if growth moves upward relative to our expectations, we could see the upgrade in the second half of this year as well” it says.

We see real GDP growing to 2.5% year-on-year in 2023 and 2.1% in 2024, thanks to falling inflation, the path of real income turning positive and continued support from the Recovery Fund (RRF), it stressed.

In terms of elections, Morgan Stanley notes that Greece heads to the polls on May 21. We believe that changes to the electoral law could lead to some short-term political uncertainty – it will probably take two rounds of elections to achieve a majority government. According to the latest opinion polls, the most likely scenarios concern the governance of New Democracy, either alone or in coalition with PASOK. A coalition between SYRIZA and PASOK seems possible, but less likely. Either way, the RRF will keep key reforms “under control” until 2026, he adds, and reckons it’s unlikely to see significant changes in politics after this election.