GIG Economic Bulletin –26 July 2021

Ratings agencies continue to see strong growth momentum in Greece in 2021 despite the threat posed by the Delta variant, as unemployment remains under control and industry shows further signs of recovery from the lockdowns.

Economic BulletinInsights
International credit ratings agencies remain optimistic about Greece’s growth prospects in 2021, in spite of the risk of the Delta variant. The new National Strategic Reference Framework (NSRF or ESPA in Greek) for 2021 to 2027, amounting to €26.1 billion, is set to be signed by the end of July. Meanwhile, new wind energy capacity totalling 260.5 MW was connected to the Greek energy grid in H1 2021.


Moody’s Analytics forecasts 4.8% growth for 2021 and 3.7% in 2022 according to its baseline scenario. The forecast sees the spread of the Delta variant of Covid-19 as the biggest threat to the economy. The bullish scenario predicts 5.5% and 6.9% growth for this year and the next, while the adverse scenario sees 3.4% for 2021 and a marginal recession of -0.7% for 2022.

Scope ratings sees the Greek economy growing by 6.5% in 2021 and 3.6% in 2022, in spite of the risk identified to tourism from the Delta variant. The agency bases its positive forecast on the strong growth confirmed in H1, as well as the evolution of key indices capturing growth in industrial production and retail sales.

Industrial turnover rose by 37% Y-o-Y in May according to the Hellenic Statistical Authority (ELSTAT), compared with a revised increase of 52.3% in April. The May increase, which was largely driven by manufacturing, reflects the rebound from the lockdown of the previous year.

The number of unemployed registered at the Manpower Organisation (OAED) reached 948,722 in June, down by 64,441 compared to May. The figure is around 10,000 higher than June 2019, the last comparable pre-lockdown period.

Greece’s current account deficit came to €1.4 billion in May compared to €2.08 billion in April. On a Y-o-Y basis, the deficit grew by €476.7 million compared to May 2020. The Y-o-Y change is mainly attributable to the goods sector, where the deficit widened by over 50% driven by rising imports, according to the Bank of Greece (BoG).

Structural Funds

The new EU Structural Funds framework for 2021-2027 totalling €26.1 billion is expected to be signed by Greece and the EU by the end of July. It includes more than €8 billion for regional programmes, €4.16 billion for human resources, €3.89 billion for competitiveness and €3.61 billion for the environment.


Wind generators with a total capacity of 260.5 MW were connected to the grid in the course of H1 2021, reflecting investments of €260 million. The new generators increase wind power capacity by 6.3% compared to the end of 2020.

Wind farm. Copyright: r.classen / Shutterstock


The Fortress-Bain Capital-doValue consortium emerged as the preferred bidder for NBG’s Frontier portfolio. According to the terms of the deal, NBG will keep €3.3 billion worth of senior notes on its books, while the buyers will get the mezzanine tranche worth €450 million and the junior worth €2.45 billion.

Foreign funds will own 50% of all Greek private debt by the end of the year. Funds currently hold €43 billion worth of loans, and the number is expected to exceed €70 billion once the Hercules II state-backed securitisation facility has been fully utilised.

Stock Market

The ASE general index closed the week marginally down by -0.28% at 864.44 points, a remarkable recovery after suffering daily losses of -3.88% on Monday on the back of the global rout caused by concerns over the spread of the Delta variant. Trading volumes remain low, approaching levels last seen during the lockdown in January.

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