GIG Economic Bulletin – 27 September 2021

Another round of bumper results from tourism suggests that national targets have been hit well before the end of the year. Speaking from New York, Prime Minister Kyriakos Mitsotakis suggested the recently upgraded 5.9% growth forecast may be “too pessimistic,” while proposing an EU carbon hedging mechanism to mitigate rising energy prices.

Economic BulletinInsights
Greek government unveiled a proposal for an EU-funded hedging mechanism aimed at mitigating the skyrocketing energy prices, while the country’s largest power company PPC announced a share capital increase that will see the state’s participation drop to 34%. Moody’s upgraded all four of Greece’s systemic banks, while a rebound in the travel industry suggests Greece has already reached targets set out for 2021.


The 11th post-programme surveillance review by the EU institutions was mostly positive, outlining the acceleration of the economic recovery and progress on some reforms. Although the growth forecasts remain unchanged, it is believed that they will be revised soon towards 6%. The report also sees the debt-to-GDP ratio dropping to 57.6% by 2060.

With most indicators pointing to continuing growth in Q3, the latest report by the Parliamentary Budget Office (PBO) cautions against complacency, noting that many of the factors stimulating growth are not structural but relate to transitory factors including the reopening of activities, the ECB’s accommodative stance, and extensive support initiatives by the government.

The Hellenic Statistical Agency (ELSTAT) reported a significant rise in average incomes, which reached €10,041 in 2020, equal to a 7% Y-o-Y increase. This is the fourth successive rise since 2015, with incomes now approaching the levels of 2012.

Greece posted a current account surplus of €538.1 million in July, from a deficit of €1.34 billion in June and a deficit of €797.3 million in July 2020, according to the Bank of Greece (BoG). Services, and specifically travel receipts, were primarily responsible for the reversal.

Industrial turnover continued on the recovery path with a 25.2% Y-o-Y rise in June according to figures released by ELSTAT. The manufacturing sector was the main positive contributor, partly offset by a drop in mining and quarrying activity.

Business deposits stand at €35 billion, a number not seen since 2009, while the figure has not exceeded €18-20 in the intervening decade. According to bank officials, deposits of businesses with revenues below €2 million stand at a record €4 billion. In a further indication of abundant liquidity, SMEs have been turning down the cheap working capital through state guarantees, having drawn just €23 million, from a €414 million on offer.


Speaking to Bloomberg TV on the fringes of the meeting of the UN General Assembly in New York, Prime Minister Kyriakos Mitsotakis said Greece would be stepping up decarbonisation efforts at home, while hinting that Greece’s recently upgraded 5.9% growth forecast might prove “too pessimistic.” Meanwhile, the government has laid out a proposal for the creation of an EU-funded carbon hedging mechanism to mitigate the effects of skyrocketing energy prices across the region, and impacts on people and companies.


State privatisation agency HRADF is expected to move to the binding offers stage for the ports of Alexandroupoulis and Kavala in the last quarter of 2021. HRADF is currently evaluating the offers for the Port of Heraklion and will move ahead with the Port of Volos within 2022.


PPC has announced that it will proceed with a €750-million share capital raise that will see the state’s stake drop to 34% from 51%, without losing the management of the company. The book building process will be followed for retail and institutional investors in Greece and abroad, without a first call to existing institutional shareholders, while the Greek state will not be participating.


Greece’s travel balance came to a surplus of €2.14 billion in July compared to €610.2 million a year ago, according to figures published by the BoG. Receipts came to €2.26 billion for the month, more than tripling Y-o-Y from €678 million. Travel payments rose by 103% to €137.8 million. The figures confirm the rebound of tourism, however the balance remains below the €3.47 billion recorded in July 2019.

Data released by ELSTAT show that revenues for the accommodation and catering sectors in July were up four times compared to 2020 and three times compared to June. Accommodation sales in July 2021 were €933.9 million, from €282.8 million in July 2020. In June this year sales were €361 million. Catering revenues were €181.9 million in July, up from €127.4 million in 2020.

According to traffic data from Greek airports, flights were down by 36.1% from 2019 and passengers by 53.8%. Traffic recovery in August is impressive, up by 82.6% compared to August 2020. Overall, it is believed that travel receipts will reach €9 billion, half of 2019 but double those of last year, leading industry participants and government to estimate that tourism has already reached or surpassed the goals set for the whole year.

Syntagma Square, Athens, Greece. Copyright: Alexandros Michailidis /


The drop in the stock of bad loans has led Moody’s to upgrade Greece’s four systemic banks. Piraeus was upgraded to B3 from Caa2 and the other three to B2 from Caa1, while the outlook is positive for all banks, suggesting that a further reduction in NPE stocks could lead to a new upgrade.

Piraeus Bank plans further NPE-reducing transactions worth €4.5 billion in the coming quarters. They include a combination of securitisations and sales which will take the NPE ratio from 45% in December last year to 9%. The bank is in talks with Bain Capital over the €530 million Sunshine leasing portfolio. Bain has already purchased €1.6 billion of loans from NBG.

Stock Market

The ASE general index lost -4.53% on a weekly basis to close at 873.1 points on Friday. Jitters in the global markets affected trading during the week, while PPC’s surprise announcement of a share capital raise brought a further sell-off on Friday.

Partners of Greece Investor Guide

Load More...
Back to top button