GIG Economic Bulletin – 22 June 2021

Last week’s upgraded quarterly growth figures, followed by the European Commission’s green light for Greece’s national recovery plan, have nudged up this year’s growth predictions by domestic and global institutions. Several now see a rebound touching or exceeding 5%.

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Greece’s National Recovery and Resilience Plan was approved last week in Athens by European Commission President Ursula von der Leyen; however, the plan still needs to be greenlit by the EU Council. Meanwhile, according to the latest ruling by the Council of State Hellinikon is set to be transferred to Lamda Development by the end of June, and systemic lender Piraeus Bank reached a deal for the €7.2-billion Sunrise I securitisation.


The Parliament’s Budget Office has revised its 2021 growth forecast upwards to between 3.6-4.8% from its previous baseline of 2.7%. The report, however, cautions that the projections contain a high level of uncertainty.

A series of foreign institutions have also issued upgraded forecasts for the current year, including ratings agency Scope Ratings (6.5% from 4.5% previously), DBRS (5% from 4%) and Bank of America (5.1% from 3.4%).

The Bank of Greece (BoG) issued a revised growth estimate for 2022 in its Financial Stability Report, moving the dial up from 4.8% to 5.3%. The 2021 forecast is expected to remain unchanged at 4.2%.

The government’s Medium-Term Fiscal Strategy due out in the next few days sees GDP reaching €217 billion in 2025, with a return to surpluses in 2024. The strategy sees the recovery starting gradually this year and accelerating significantly in 2023-2025 when it will add €10 billion annually to the economy.

Data from the Labour Ministry’s ERGANI system show 95,166 new jobs created in May, with 44,229 jobs created in the accommodation sector and 25,480 more hires in food and beverage. Compared to last May, when Greece was taking its first steps out of lockdown, 62,191 more jobs were created; however, compared to May 2019, there were 10,118 fewer hires. During the first five months of the year, 177,108 jobs were created, against 5,826 in the same period of 2020.

Greece climbed three spots in the Institute for Management Development Index which measures economic competitiveness. Greece is now ranked 46th, having gained 12 places in the last two years, while the country is held back mainly by its scoring for public debt, credit ratings, and capital investments.

Greece 2.0

European Commission President Ursula von der Leyen was in Athens for the launch of Greece’s National Recovery and Resilience Plan, which is among the first to gain approval from the Commission. The Greek Prime Minister welcomed the approval from Brussels as the first act of a new era for the country. Kyriakos Mitsotakis said that combined with EU structural funds more than €100 billion of funds could be mobilised that will create 200,000 jobs and boost growth by 7% over the next 6 years.


Athens International Airport expects 11.5 million travellers this summer, approximately 45% of 2019 traffic, compared to 8 million in 2020.

According to aviation safety body Eurocontrol, air traffic to Greece will take three years to regain 2019 levels. In the baseline scenario, flight levels in 2024 will be 92% of 2019, however a new pandemic wave would push the estimate down to 72%.

According to official industry data, 2,800 hotels have opened so far this season, with occupancy rates currently standing at around 25%.

Athens International Airport. Copyright: Tony_Traveler85 / Shutterstock

Real Estate

Commercial property values and rental prices held steady during the pandemic despite the rise in remote working. In the second half of 2020 office prices dropped by just 0.2% compared to the first half of the year, while rents increased by 0.8% over the same period. Shop prices stayed stable, while shop rents increased by 0.6%.


Hellinikon SA is due to be fully transferred to Lamda Development on June 25, following the latest Council of State ruling which freed the project of any remaining legal obstacles.

The Greek state has agreed the transfer of an additional 16% stake in Piraeus Port to COSCO, granting the Chinese company a 2-5 year extension on €293.7 million of investments which were part of the original agreement between the two parties. The transfer, for which COSCO will have to submit letters of guarantee for the outstanding investments, brings its total ownership stake in the port to 67%.

Four consortia are about to submit binding offers for the Port of Alexandroupolis and another four for the pier at Kavala Port. Meanwhile, seven out of nine original bidders advanced to the next stage in the tender for the Port of Igoumenitsa, while Heraklion and Volos are due to enter the expression of interest phase in the summer.


Piraeus Bank has reached a deal for the €7.2-billion Sunrise I securitisation with Intrum and Serengeti Asset Management. The deal will push the bank’s NPE ratio down by 13% or €4 billion. Combined with the Vega and Phoenix securitisations and other organic actions, the NPE ratio is expected to drop down to 3% in H1 2022, below €1 billion.

Alpha Bank will be opening its share capital increase book on June 28 for a total amount of €800 million, after securing approval from its AGM.

The total loans managed by credit servicing firms came to €42.8 billion in Q1 2021 from €39.9 billion in Q4 2020, an increase of 7.2% quarter-on-quarter (Q-o-Q). The increase reflects the banks’ efforts to clean up their balance sheets through sales and securitisations of bad loans.

The BoG’s financial stability report notes that the ownership of Greek government bonds by Greek banks has increased to €26.7 billion, from €16.4 billion in 2019, state guarantees have risen as a result of balance sheet clean-up initiatives, and deferred tax credits are also higher. By the end of 2020, the banking system’s dependency on the state stands at 21.4% of total assets and 36.5% of GDP, vs. 13.8% and 18.5% respectively in June 2018.

Stock Market

The ASE general index closed the week down -2.19% at 905.55 points. Despite recent choppiness, the index has held onto gains of just under 12% in the year to date.

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