GIG Economic Bulletin – 19 July 2021

Greece cleared the final hurdle to receive its first EU recovery funds, with 12 projects poised to launch and a pipeline of reforms to complete by year-end. Fitch affirmed its BB rating, with a punchier growth projection for the current year.

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Fitch’s credit rating for Greece is still two notches below investment grade, yet the ratings agency raised its growth forecast for 2021. Meanwhile, the government unveiled the first 12 projects of its recovery and resilience plan, progress is made on the privatisations of DEPA Commercial and the Egnatia Highway, and independent studies position Greece as a leading investment destination within the EU.


Fitch Ratings kept its credit rating for Greece at BB with a stable outlook but raised its 2021 growth projection to 4.3% from its previous estimate of 3%. Weak medium-term growth prospects, high levels of NPLs and a high volume of general government deficit and external debt were cited as the reasons for keeping the rating two notches below investment grade.

The IMF has issued one of the most conservative growth projections for Greece among international institutions and analysts, putting it at 3.3% for 2021 and 5.4% for 2022. The figures are also lower than the government’s forecasts of 3.6% and 6.2% respectively.


Final approval from the ECOFIN unlocked the disbursement of the €4 billion down payment from the EU recovery facility. The first regular instalment of €3.5 billion which is due at the end of the year is conditional on legislative reforms scheduled for the coming months.

The first 12 projects of the Greece 2.0 recovery programme have been announced, with budgets totalling €1.4 billion. The majority focus on modernising state infrastructure and digitalising public services, but highway construction and the Acropolis restoration are also included.

Greece has submitted its plan for the EU 2021-2027 structural funds, and is expected to receive approval by the end of July. The package includes €20.9 billion of EU funds and €5.9 billion in national participation.

Transport & Logistics

Athens and Piraeus held onto 8th place in the Xinhua-Baltic International Shipping Centre Development Index of the largest global shipping centres. The report notes Greece’s considerable presence in the shipping sector with over 20% of global capacity, and Piraeus’ status as one of the fastest growing container ports.

Piraeus Port. Caption: The Port of Piraeus.

Greece will be using close to €450 million from the first tranche of EU recovery funds to complete the 70.5-km final section of the E65 highway, linking central and northern Greece to the western Port of Igoumenitsa, after Parliament approved an amended framework on Tuesday.


According to the EU’s European Investment Monitor, foreign investment in Greece increased by 77% in 2020, while investments in Europe decreased by -13%. Greece absorbed 0.7% of European FDI, more than double the average rate of the last two decades, but still low relative to the country’s population and GDP.

A survey by EY found that one in three companies surveyed plans to invest in Greece, while the country’s attractiveness as an investment destination increased from 38% to 62% in the report’s scoring, putting it within the European top 10.


Italgas and EP Investment Advisors submitted the two binding offers for gas distribution network DEPA Infrastructure, with procedures expected to be completed by late 2021/early 2022.

The GEK Terna-EGIS consortium submitted the winning bid for the Egnatia Highway concession, outbidding rivals VINCI-Mytilineos-Avax by at least 15%. The winning consortium now has a week to submit an improved offer as per the terms of the tender.

Pre-sales of properties at Hellinikon have reached €700 million, and are expected to hit €1.2 billion by the end of the year, exceeding all earlier estimates. Around 60% of space in the shopping mall has already been leased, even before the final plan was presented.


Airport traffic in the first days of July reached 65% of 2019 levels, compared to 54% in June according to the Greek Civil Aviation Authority.

Hotel occupancy during June was 34.5% among hotels that were open, which translates into 28.9% for the industry as a whole, according to the hotels association of Greece.

Real Estate

New building permits more than doubled In April on a Y-o-Y basis, marking a 124.5% increase, on the heels of a 42.5% rise in March. The total number of permits came to 2,209.


A report by UBS looking at NPEs across Europe found no cause for concern for Greek banks, which currently hold only 1.1% of their loans under pandemic moratoria.

Stock Market & Corporates

The ASE general index retreated by -0.86% on a weekly basis to close at 866.81 points, with large caps being the biggest losers at -1.39%, while bank stocks fell by -1.16%.

Greek companies issued just under €4 billion in corporate bonds in H1. Another three issues are in the pipeline by hotel group Oak Tree-Sani (Ikos), Capital Maritime and Fourlis Group for a combined €400 million.


Greece is experiencing a surge in Covid-19 infections, from 25 new weekly cases per 100,000 population on June 25 to 177 per 100,000 on July 17. A night-time curfew and music ban were introduced on the holiday island of Mykonos in response to a local outbreak.

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