UBS has revised down its forecast for Greece’s economic growth in 2025 to 2.3% from 2.6%, citing weaker-than-expected performance in the first quarter of the year. However, the Swiss investment bank remains broadly positive about the country’s prospects, projecting growth of 2.4% in 2026, supported by consumption, investment, and tourism.
Economic Outlook
Despite the downgrade for 2025, UBS highlighted key positive trends. Unemployment is expected to fall from 10.1% in 2024 to 8.5% in 2025, reaching 7.7% in 2026. Private consumption is projected to rise 1.5% annually over the next two years, while government spending is set to remain stable.
Exports are forecast to remain weak this year but rebound by 4% in 2026, while imports are seen rising by just 1% in 2025 and 3% in 2026. Industrial production is also expected to accelerate, with growth of 2% in 2025 and 4% in 2026.
Greek Banks and Credit Expansion
UBS noted that credit growth remains a central theme for European banks and a key driver for Greek lenders. Greece’s four major banks reported a 17% annual increase in corporate lending (+2.6% quarterly) and overall loan growth of 12.3% year-on-year (+2.7% quarterly).
This significantly outpaces the broader European banking sector, where average loan growth stood at just 1.7% annually. UBS emphasized that Greek banks continue to reduce their stock of non-performing exposures (NPEs), which has affected gross loan balances but strengthened the sector’s outlook.
Investment Recommendations
Despite the sector’s sharp rally on the Athens stock exchange, UBS continues to recommend buying Greek bank stocks. Its target prices stand at:
- Alpha Bank: €3.70
- Eurobank: €3.64
- National Bank of Greece: €13.40
- Piraeus Bank: €7.60
UBS concluded that Greece remains a standout in Europe in terms of credit expansion, underlining its confidence in the banking sector’s role in supporting growth despite near-term economic adjustments.
