GIG Economic Bulletin – 11 October 2021

Another positive revision brings the official growth forecast to 6.1% GDP, while eight out of ten Greek CEOs are confident of strong economic growth over the next three years.

Economic BulletinInsights
Germany’s RWE Renewables and Greece’s PPC Renewables sign 2 GW solar deal with projects slated for development in PPC’s legacy lignite mines and various locations in northern Greece. Meanwhile, Greece’s official GDP growth forecast has been upped to 6.1%, and investments are expected to increase to €26 billion in 2022.


The official growth forecast has been revised upwards to 6.1% for the current year and 4.55% for 2022. The draft budget targets a reduction in the primary deficit of €11 billion, to be achieved through a combination of strong growth and winding down of pandemic support initiatives. Tax revenues are expected to rise by €4.6 billion thanks to growth, while debt is expected to drop from its historic high of 205% of GDP. 

Finance Minister Christos Staikouras has said that 2022 will be a year of fiscal consolidation, adding that any additional fiscal space will be used for further tax cuts. He stressed that tax relief measures that have already been adopted are set to be permanent. 

The Finance Ministry estimates that investments in 2022 will rise to €26 billion combining public and private spending, from €21.1 billion in the current year and €18.4 billion in 2020. 

HSBC is forecasting 7.5% growth for this year, and 5% for 2022. The bank’s analysts sound a note of caution about the deficit, which they estimate at 10.5% for the current year and 6.5% for the next. 

The trade deficit increased by 43.3% Y-o-Y in August to reach €2.2 billion, according to the latest data from the Hellenic Statistical Authority (ELSTAT). Imports totalled €5 billion, rising by 38.3% Y-o-Y. Exports totalled €2.79 billion, an increase of 34.6% compared with the same month last year.

Greece’s PMI dipped to 58.4 points in September from 59.3 points in August, according to index compilers Markit. The commentary notes that the latest figure shows that output continues to expand with new orders, however supplier delivery delays have caused a record rise in backlogs.

The Industrial Production Index rose by 10.1% Y-o-Y in August, after a 7.8% increase in July, according to the latest report from ELSTAT. In the year up to August the IPI has increased by 9.5% Y-o-Y. 

Greece’s Consumer Price Index (CPI) rose by 2.2% Y-o-Y in September, marking the sharpest increase since January 2012. The rise follows a 1.9% increase in August. 

The government has increased the amount earmarked for energy subsidies to beat rising wholesale prices to €500 million, while it has also negotiated further discounts from the big suppliers of electricity and natural gas.  


The Public Debt Management Agency (PDMA) aims to borrow €10 billion in 2022, leveraging participation in the European Central Bank's (ECB) pandemic emergency purchase programme (PEPP), with the aim of increasing the liquidity of the GGB market and reducing spreads. Greece also plans to pay off in full the €1.87 billion still owed to the IMF and the GLF (bilateral loans) instalment from the first programme, and to reduce its debt-to-GDP ratio by 15.2 ppts.

Plans by the ECB for a transitional asset purchase programme to succeed PEPP have been welcomed by Bank of Greece governor Yiannis Stournaras, who noted that QE under flexible terms would allow a smooth transition for Greece until it regains investment grade. 

Bank of Greece Copyright: Andronos Haris /

Tax Incentives

A tax bill targeting small and medium enterprises will introduce tax reductions of 30% over three years as an incentive for mergers. The bill also sets the terms for the disbursement of €3.5 billion from the first instalment of the RRF.


PPC and German RES giant RWE Renewables have signed the deal to form a “green” consortium for the installation of 2 GW of large-scale photovoltaics starting in early 2022, situated in PPC’s legacy lignite mines and at various locations in northern Greece. The agreement is seen as a landmark in PPC’s “green transition” plan which will see the retirement of the company’s coal plants by 2023, and underlines the importance of extroversion for the state-controlled utility’s future strategy.


International arrivals reached 50% of 2019 levels between January and August this year, according to flight data from airports gathered by INSETE Intelligence, with the strongest recovery seen in regional airports such as Santorini and Mykonos. 


Eight out of ten Greek CEOs are optimistic about economic growth over the next three years, according to the findings of KPMG’s CEO Outlook Survey. Almost half of them are planning investments exceeding 10% of revenues.

Stock Market

The ASE general index closed Friday’s session with weekly gains of 2.47% at 892.60 points. 

The banking sector was the biggest winner with gains of 3.25% for the week.

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