Goldman Sachs links the recovery of Greece’s investment grade to the outcome of the electionsestimating that the implementation of the government’s plan to triple the expenditure of the Recovery Fund during 2023 will be the last step in upgrading the credit.

“The outcome of the election will be important in accelerating the implementation of the Recovery Fund and ensuring long-term growth through capital accumulation. A convincing implementation of the Recovery Fund to strengthen and facilitate the structural reform of the economy will likely be the last step for Greek bonds to regain their investment grade»is typically reported.

As the analysis of the American investment house notes, Greece heads into the elections showing higher growth and lower inflation compared to its average Eurozone.

Opinion polls give New Democracy a clear lead, but show that the party will not secure self-reliance. Therefore, two options qualify as more likely: Either a coalition government SW with PASOK after the May 21 election or a fresh run at the polls, with the new electoral system giving seat bonuses to the biggest parties.

New Democracy may have an incentive to move on the “make or break” logic and push for repeat elections so that it can either govern alone or have more power within a governing coalition, Goldman Sachs analysts explain.

According to Goldman Sachs, the government’s plan to increase the primary surplus can reduce debt by almost 10 percentage points a year over the next three years. Even in the negative scenarios that the house “ran”, with a shock of 1 unit in growth and a widening of the spread by 100 basis points, the debt shows only small deviations from this path.


Thus, the house characterizes the fiscal support from Europe, which will exceed 3% annually until 2026, as an opportunity to address the investment gap approaching 7% of GDP annually.

Greece has never recovered to pre-crisis levels, with GDP still 26% lower than in 2008. But Goldman Sachs believes the election outcome is important to finalize the implementation of the Recovery Fund and ensure long-term development.