GIG Economic Bulletin – 6 December 2021

The OECD expects the Greek economy to grow by 6.7% this year, as economic sentiment returned to pre-pandemic levels in November. Amazon Web Services became the latest global tech company to announce a major investment in Greece, with the establishment of a digital Local Zone.

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Amazon Web Services announced a landmark investment for the establishment of a “digital incubator” hub in Greece aimed at boosting research and business related to space policy. The OECD expects economic growth in 2021 to reach 6.7% and investments to increase by 17.3%. Meanwhile uncertainty over the ECB’s post-PEPP treatment caused the yield on benchmark 10-year Greek government bonds to reach 1.3%.


The OECD sees this year’s growth at 6.7% and next year’s at 4.8%, slowing down to 2.9% in 2023. The latest forecast by the international organisation predicts that investments will jump by 17.3% while exports will increase by 13%.

Economic sentiment returned to pre-pandemic levels, with a 1-point monthly rise taking it to 113.4 points in November. Economic sentiment has been improving since February, recovering from 90.7 points in January according to the European Commission index.

Manufacturing PMI remained broadly stable in November at 58.8 points compared to 58.9 in October. Greek manufacturers remain upbeat about the prospects in the year ahead, largely thanks to hopes for a further uptick in client demand and increased stability in vendor performance.

Retail sales rose by 13% Y-o-Y in September according to the Hellenic Statistical Authority (ELSTAT). Retail sales have been growing continuously since April. Sales of clothing and footwear rose by 26.1% while that of automotive fuel increased by 20%.

The employment balance turned negative by 70,048 jobs in October, as the tourism season tailed off. According to the Labour Ministry’s Ergani database, this marks a drop of 36,692 positions since last October, suggesting that the expiration of pandemic-related employment protection schemes is also starting to have an effect.

Ratings agency DBRS warned that the new Omicron variant of Covid-19 poses a risk to tourism in 2022, especially in countries with lower vaccination rates, including Greece and Cyprus.


Speaking at the Harvard Business School Club, Prime Minister Kyriakos Mitsotakis raised the alarm about the threat posed by energy price hikes to the green transition. Mitsotakis argued that eurozone negotiations on the Stability and Growth Pact should allow flexibility in order to enable members to balance fiscal prudence with green investments.


Uncertainty over the ECB’s post-PEPP treatment of Greek bonds has pushed yields on the 10-year benchmark to 1.3% over the past week. Combined with PEPP, which is scheduled to run until March, the ECB has leeway for up to €8 billion in purchases. The next meeting is scheduled for December 16, however there is already talk of PEPP being extended due to the risks posed by the Omicron variant.

Rating agencies are holding back on their rating reviews for Greek debt in anticipation of the ECB’s decision on the post-PEPP framework. S&P are yet to release the dates of their next announcements, while Moody’s skipped their recent scheduled rating review. On the present evidence, Greece is aiming for investment grade by late 2022 or early 2023.

JP Morgan sees Greece at investment grade in the second half of 2022, sooner than the Finance Ministry’s goal of securing it in the first part of 2023. The bank names GGBs as one of its key trades for 2022. 


Amazon Web Services announced an investment of €150-200 million in establishing a Local Zone in Greece, one of 30 hubs the company will be creating in 21 countries around the world. The company views the hub as a “digital incubator” which will encourage and strengthen research and business initiatives related to space policy.

Data centre. Copyright: jamesteohart /


NBG reported profits of €767 million in the first nine months of the year and capital adequacy of 17%. The bank is in the final stages of the Frontier securitisation which will bring the NPE ratio down to 11.9%.

Alpha Bank reported losses of €2.5 billion in the first nine months of 2021 due to impairments from its balance sheet clean-up, including the Galaxy, Cosmos, and Orbit transactions. The outcome will be an NPE ratio of 13% by the end of this year, going down to single digits in 2022.

The Bank of Greece’s latest financial stability report notes a significant improvement in Greek banks’ asset quality over the first half of the year, during which the total stock of NPEs was reduced by 38%, from €47.2 billion to €29.4 billion. However, the report warns that the full impact of the pandemic on lenders’ portfolios has yet to become clear.

An estimated €9 billion of bank loans currently covered by pandemic measures are due to resume normal servicing in Q1 2022, including €4 billion loans to tourism businesses which are frozen until the end of the year, and mortgage loans covered by the Bridge scheme. Banking sources are optimistic that bad loans linked to the pandemic will not exceed €3 billion.

Stock market

The ASE general index gained 2.36% on a weekly basis to recoup some of the losses of the previous week’s sell-off. The index closed at 879.23 points on Friday.

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