Greece Public Debt (% of GDP)

Public Debt in Greece

Growth should have slowed in Q1 on tighter financing conditions. That said, survey data suggests that activity remained healthy. Economic sentiment averaged higher in Q1 relative to Q4, likely reflecting a softer-than-expected downturn. Moreover, the manufacturing PMI improved throughout the quarter as price pressures eased. Meanwhile, on 21 April, S&P affirmed the country’s ‘BB+/B’ rating and upgraded the outlook to positive, highlighting sound structural reforms and a sharp decline in the fiscal deficit. In politics, Greece will hold parliamentary elections on 21 May. The ruling right-wing New Democracy party is narrowly leading the leftist Syriza in polls. That said, it is widely expected that no party will be able to form a government, given that the winner will not receive the usual 50-seat majority bonus. Notably, if additional elections were held, the bonus would come back into effect.