GIG Economic Bulletin – 25 October 2021

The latest indications offer high hopes for tourism, with revenues expected to approach two thirds of the 2019 high, while industry continues its upward momentum. The Finance Ministry and the institutions are keeping an eye on the estimates of the budget deficit which has crept up above 10% as a result of the pandemic.

Economic BulletinInsights
The approval of leading power company PPC’s share capital increase will bring the state’s participation down to 34%, Italian company Fincantieri joins forces with the U.S.’s ONEX Shipyard to manage and overhaul the Elefsina Shipyard, and Greece and Egypt sign an MoU to develop an underwater electricity interconnector. Meanwhile, the positive performance of Greece’s tourism industry points to 66% of the revenues of the pre-Covid high.


The OECD does not include Greece in the countries requiring corrective action to bring debts down post-Covid. The debt path up to 2060 is seen as favourable, while growth is expected to average 1.3% in the decade up to 2030 and 1.1-1.3% in the decades up to 2060.

The IOBE thinktank sees this year’s growth at 8-8.5%, narrowing significantly to 4% in 2022, with an adverse scenario of 2-2.5% should the pandemic flare up again. IOBE sees a risk in energy prices cascading across most products, potentially dulling growth.

Industrial turnover jumped 31.6% in August according to the Hellenic Statistic Authority (ELSTAT), continuing its strong recovery after a 25.1% increase in July. The increase in August was the result of a 31.8% rise in manufacturing revenue, and a 13.4% rise in the mining and quarrying index. Revenue in the domestic market increased by 28.2%, while business abroad jumped by 38.1%.

A report by the Tax Foundation presented by the Centre for Liberal Studies (KEFIM) ranks Greece 29th among 37 OECD countries on the table of tax competitiveness. The 5% tax on dividends is one of the lowest in the OECD; however, Greece lags in most categories and has one of the highest VAT rates at 24%.


ELSTAT has revised the 2020 deficit to 10.1% of GDP from its previous estimate of 9.7%, while it puts debt at 206.3% of GDP. The deficit landed at €16.67 billion as a direct result of the pandemic, the lockdowns and the extensive support packages.

State revenues over the first nine months of the year came to €39.45 billion, overperforming the target by €1.36 billion. Excluding the advance from the RRF and the profits from the SMP and ANFA bond-buying programmes, the overperformance amounts to €1.15 billion, largely from tax revenues reflecting the uptick in tourism.


PPC’s €750-million share capital raise was approved with a wide majority in the extraordinary shareholders meeting. The state-controlled utility has already received expressions of interest from 48 entities, including CVC, Blackrock and Oakhill. Ideally, PPC would like a good spread with two or three anchor investors of 5-10% that will ensure price stability for the stock, while Greece’s superfund HCAP will maintain a 34% stake, reduced from the current 51%. The EBRD is also likely to participate with a small share.


Italian shipping company Fincantieri will be the strategic investor in the Elefsina Shipyard in cooperation with ONEX Shipyards which runs Syros Shipyard and will also manage Elefsina. Elefsina has debts to the state and banks in the region of €450 million which will be restructured down to €250 million and, according to sources, the new investors plan to implement a modernisation programme of €100 million.


Greece and Egypt have signed an MoU to pursue an underwater electricity interconnector linking renewable power generation in Africa with the European markets. The project is seen as part of an emerging East Mediterranean network, complementing links such as the interconnector linking Greece with Cyprus and Israel.


The latest data from the tourism sector suggests that revenues could reach €12 billion, or 66% of 2019, significantly exceeding the target of 50%. Confirmed revenues for the first eight months of the year totalled €6.6 billion according to the Bank of Greece, roughly half that of the same period in 2019. However, August showed a strong acceleration, hitting 76% of 2019 while industry data shows hospitality bookings for September reaching 65% of capacity.

Zakynthos, Greece. Copyright: VanekPhoto_21 /


Data presented in Parliament by the head of the Hellenic Banking Association show that loans of €8.8 billion have been extended to Greek firms, €5.2 billion of which are to SMEs. The Finance Ministry commented that this is an indication that flow of credit to the economy is taking place, although not yet at the desired pace.

The share capital increase by Attica Bank has attracted interest from six investors, including Bain, Ellington and JC Flowers. Until the €240-million share capital raise is completed, HFSF holds 68.2% of the non-systemic lender, followed by the engineers’ pension fund with 14.7%, and pension fund EFKA at 10.3%.

Stock Market

The ASE general index rose by 1.15% on a weekly basis to break the 900 point barrier, landing at 905.4 points.

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