UBS maintained a growth forecast for Greece at 2.4%, driven largely by high demand in auto-moto sales, consumer loans, and business confidence.
In its “Global Economics & Strategy” report, the firm highlights the primary fiscal surplus in the 2nd half of 2024 exceeded the €1.2 billion target set reaching €2.9 billion, while also noting that ECOFIN approved Greece’s updated Recovery and Resilience Facility (RRF) plan.
In addition, UBS underlines that the consumer price index (CPI) rose by 2.7% year-on-year in July, with the core CPI continuing to hover around 3%.
UBS forecasts GDP growth of 0.6% for 2024 and 1.2% for 2025 in the Eurozone, noting that pressure in the coming quarters will continue to mount, driven by restrictive monetary policy, a weak external environment, and fiscal consolidation.
However, low unemployment and a recovery in real wage growth are expected to support household consumption, which accounts for 55% of GDP.
So far, the GDP for the first and second quarters surprised to the upside (both +0.3% quarter-on-quarter), but for the third quarter, UBS expects a decrease to 0.2%.
UBS forecasts that the recovery in the Eurozone is likely to remain moderate and uneven, with manufacturing and exports boosting the trajectory.
German economic performance persistently lags behind the Eurozone, noting that in Q2 the country’s GDP decreased by 0.1% compared to the previous quarter, much weaker than the Eurozone.
