GIG Economic Bulletin – April 11, 2022

The latest economic forecasts reflect higher inflation and more modest growth due to the impact of the war in Ukraine. As contingency plans come into force to secure energy supplies, it is estimated that over €44 billion will be invested in energy projects by 2030.

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While the yield on GGBs has risen to 2.75%, analysts believe costs to be manageable unless this nears 4%. Greece completed an early repayment of €1.86 billion in loans to the IMF, the country received its first disbursement from the RRF amounting to €3.6 billion, and Prime Minister Kyriakos Mitsotakis announced the extension of the life of certain lignite-based power plants until 2028.


The Bank of Greece (BoG) is lowering its growth projection from 4.8% to 3.8% in the baseline scenario, and 2.8%, in the adverse scenario. Inflation is now seen at 5.1% in the baseline scenario and 7.1% in the adverse. 

Moody’s has revised its growth estimate down to 3% from 5.2% GDP in real terms. The ratings agency sees average inflation at 5% and expects a significant widening of the trade deficit.

Greece repaid in full €1.86 billion of outstanding debt to the IMF, which was due to be repaid by 2024. What remains now is the prepayment of €2.65 billion of bilateral loans in the Greek Loan Facility, which is planned for December.

Greece received its first RRF disbursement of €3.6 billion, €1.72 billion in grants and €1.84 billion in loans.

The trade deficit nearly tripled to reach €3.12 billion in February, a Y-o-Y rise of 171.8%. Excluding oil products, the annual rise was 67.8%.

Inflation hit 8.9% in March. According to the Hellenic Statistical Authority (ELSTAT) which compiles the CPI index, electricity prices recorded a rise of 79%, natural gas 68% and heating oil 58.5%. The cost of food and non-alcoholic drinks went up 8.1%, housing costs 29.9% and transport 15.4%.


The ECB’s chief economist Philip Lane told the Kathimerini newspaper that the central bank stands ready to use a wide range of options to deal with any fragmentation of monetary policy that could lead to high borrowing costs for Greece. 

The yield on the Greek benchmark has risen to 2.75% and a spread of 209 basis points. Analysts see the yield rising to 3%, which is manageable, however it is believed that costs could become an issue if they approach 4%.


The Prime Minister announced that the country’s largest power supplier PPC will be given permission to extend the life of certain lignite power plants until 2028 – up from 2025 – in order to reduce dependence on natural gas, while noting that decarbonisation remains a strategic objective. Lignite extraction will increase by 50% to meet demand.

PPC reported a 22.7% increase in turnover in 2021. The utility reported losses after tax of €18.4 million as profits from production activities were largely offset by losses in the supply business due to the high cost of natural gas and emissions permits, as well as discounts offered to customers to absorb cost rises.

The Institute of Energy for Southeast Europe (IENE) estimates that €44.4 billion of investment in energy projects will pour into Greece between now and 2030, with the biggest portion (€139 billion) going into the power sector.

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DESFA is expediting the addition of a floating storage unit at Revithoussa LNG Terminal. The aim is to add 100,000 cubic metres of storage to the existing 225,000 cubic metres by December 2022 or January 2023 at the latest.


Star Bulk Carriers is partnering in the creation of a “green shipping corridor” for the near-zero carbon transport of ore between Australia and Asia, along with Oldendorff Carriers, BHP and Rio Tinto.


The tender for 67% of Heraklion Port has attracted serious investor interest. Privatisation fund HRADF has completed the first round of selection with eight investor consortia.

HRADF is expected to extend the deadline for final offers on the Attiki Odos concession by a few days to May 5, from April 20, as some of the participants asked for more time to complete the alliances that will submit the offers.

The construction of the Patra-Pyrgos rail line, which will also connect Ancient Olympia with Athens as well as with air and sea transport, is due to go to tender soon with a budget of €50 million.


Cruise bookings look set to reach 64% of 2019 levels according to Celestyal Cruises, with 50% coming from the U.S., UK, Germany and France, and 27% from domestic travellers (a significant increase from 10% in 2019).

Real Estate

According to the Bank of Greece (BoG), foreign investment in property in 2021 increased by 34.4%, reaching €1.17 billion. This is back at the levels of 2018 and 80% of the record of €1.45 billion registered in 2019. The golden visa scheme is seen as contributing 25% of that investment.

A report by Berkshire Hathaway HomeServices says 63% of real estate professionals in Greece expect growth in the market to continue. The report estimates that 55% of buyers are foreign.

Lamda Development reported consolidated net profit of €191 million in 2021, compared to losses of €52 million in 2020, attributed largely to its activities at Hellinikon. Lamda is planning a high-rise with an additional 1,000 apartments during the first phase of development to meet high demand from buyers. The developer expects to receive over €200 million in 2022 in down payments for properties already in the plans.


Internet and mobile banking transactions grew by 23% in 2021, to reach €390 billion. The number of users reached 4 million for internet banking and 4.4 million for mobile banking, from 2.9 million and 1.7 million respectively in 2019.

Piraeus Bank’s business plan for 2022 to 2025 sees credit expansion of €27 billion and NPEs reduced to 3%, despite economic growth slowing down to an average of 3% annually over the next three years.

The BoG is warning about the potential rise in bad loans due to a combination of the lifting of Covid support measures and the inflationary climate. 39% of NPEs are currently classed as forborne, with a high portion of those falling back to non-serviced status, leading to a high risk of more loans becoming non-performing.

Stock Market

The ASE general index gained 3.04% in the week to close at 906.26 points, breaking the 900-barrier for the first time since the start of the war in Ukraine.

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