GIG Economic Bulletin – 14 June 2021

Greece received another vote of confidence from the markets with its latest 10-year bond offering being 12 times oversubscribed, while a wide range of economic indicators point to an impressive Q2 rebound for the economy.

Economic BulletinInsights
Greece breaks a new record with the reopening of its 10-year bond issued in January, with the yield on the benchmark government bond marking the the lowest spread vis-a-vis the German bund since 2008. The Finance Ministry plans to direct €12.7 billion in RRF loans to commercial banks in the second half of the year, while Piraeus Bank raises €600 million through a bond issuance, and NBG has received multiple offers for its €6-billion Frontier portfolio.


Industrial production rose by 22.5% Y-o-Y in April according to the Hellenic Statistical Authority (ELSTAT), making a strong rebound after last year’s lockdown. During the first four months of 2021 the Industrial Production Index rose by 8.7% Y-o-Y.

Seasonally adjusted unemployment dipped to 16.3% in May from 16.6% in April according to ELSTAT figures. The number of employed, however, has fallen by 217,400 people since May 2020, a decline of -5.6%, while the inactive population rose to 3.48 million, marking an increase of 6.7% Y-o-Y.

Greek exports increased almost 50% Y-o-Y in April reaching €3.2 billion as global demand rebounded while inflation pushed prices up. The biggest increases according to ELSTAT came from fuels and raw materials. Imports rose by a slightly higher rate of 56.8%, resulting in a widening of the trade deficit by 70% to €1.84 billion.

In its latest post-programme review, the European Commission says it expects Greece’s long-term growth rate to fall below 1.5% after 2029, in line with the IMF’s prediction of 1.4%. The report identifies the ageing population, the “brain drain” and the depleted capital stock as the main constraints on growth.


Greece has tapped the markets again for the eighth time since the start of the pandemic by reopening the book on its 10-year bond issued in January. The move drew more than €30 billion in offers from over 300 investors for €2.5 billion of debt. The yield settled at 0.888% and the spread with the Bund shrunk to 113 basis points, the lowest since 2008. It is reported that the country will use the liquidity to pay off some of its more expensive loans, while the cash reserves are set to grow to €30 billion by the end of the year, rather than the €25 billion initially targeted.


According to plans drawn up by the Finance Ministry, €12.7 billion of RRF loans will be directed to commercial banks starting in the latter part of the year in instalments of €200-€300 million to fund private investments. Each disbursement will be issued once a bank has absorbed 70% of the previous one.

COVD-19 Support

Furloughs dropped by 43% in May, from 472,899 to 202,741, as businesses resumed activities. The tapering of furlough measures also lifts constraints on layoffs, with potential implications for employment.

Real Estate

The Finance Ministry has announced a recalculation of taxable (“objective”) property values with effect from January 2022. The revision will bring increases averaging 19.5% to 7,000 of the existing 10,000 property zones (with much steeper increases in some areas), while an additional 3,500 areas will be included in the assessment scheme for the first time. The changes will have a knock-on effect on over 18 different taxes related to holding or purchasing property, as well as on rents, though they are not expected to affect the ENFIA property tax.

Building under construction in Syggrou Street in Athens. Copyright: Alika Obraz / Shutterstock

New building permits jumped by 42.7% in March Y-o-Y following a dip of -3.2% in February according to figures published by ELSTAT.

Greece’s Golden Visa issuance dropped by -88% in 2020 due to the pandemic, from 3,504 in 2019 to just 403. The scheme faces tough competition from similar schemes in Spain and Italy, while in Portugal the impact of the pandemic was contained to a -4.8% decline in new visas.


Piraeus Bank’s AT1 bond issuance raised €600 million at an interest rate of 8.75%, from offers totalling €2.25 billion. The move will improve the bank’s capital base, allowing it to reduce its NPE stock by €18 billion in 2021.

NBG has received offers for its €6-billion Frontier portfolio from Bain Capital, Intrum, and Davidson Kempner, according to press reports. The portfolio consists of 200,000 loans to 90,000 customers, 90% of which are covered by property collateral, split into 77% bad mortgages, 18% business loans, and 5% consumer loans.

Stock Market

The ASE general index notched up weekly gains of 2.68% to close at 925.83 points, marking a 17-month high. Since the beginning of June the market has risen 3.46% and grown €2 billion in capitalisation.

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