GIG Economic Bulletin – April 12, 2021

Bank of Greece and IMF forecasts continue to predict growth for Greece in 2021 despite growing public and private debt, while a major regional hydrogen project is being put forward to replace lignite in Western Macedonia.

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Forecasts by both the Bank of Greece and IMF point towards an economic recovery for Greece commencing in 2021, notwithstanding growing public and private debt. Meanwhile, Greece’s privatisation fund launched a tender for the Heraklion Port in Crete, potential bidders for a stake in power distribution network manager HEDNO were reduced to nine, and the €2-4 billion “White Dragon” hydrogen project is seeking inclusion in the EU’s list of PCIs.


The Bank of Greece (BoG) left its economic forecast for 2021 unchanged at 4.2% growth in its annual report published last week. The central bank sees recovery starting from Q2, however it notes that uncertainties remain due to virus mutations and delays in the vaccine rollout which may prolong the course of the pandemic. The BoG also warns of a fresh wave of bankruptcies which could generate new bad loans of €8-10 billion.

The IMF forecasts growth of 3.8% for the Greek economy in 2021, below the eurozone average of 4.4%. However, the Fund sees the economy growing by 5% in 2022, compared to the eurozone forecast of 3.8%. The IMF sees debt remaining above 200% of GDP into 2022, while it estimates that it will take until 2025 before it returns to the pre-crisis level of 185% GDP.

The fall in the trade deficit amounted -33.2% Y-o-Y in February, following a -23.2% drop in January based on figures from the Hellenic Statistical Authority (ELSTAT). Imports came in at €4.02 billion, recording a decrease of -7.8% Y-o-Y, while exports recorded a drop of -8.5% bringing them to €2.88 billion.

The Consumer Price Index (CPI) fell by -1.6% Y-o-Y in March according to ELSTAT, completing yet another quarter of deflation. Prices have been dropping continuously since March 2020.

Industrial production was up by 4.4% Y-o-Y in February, on the heels of a revised increase of 3.5% in January, according to figures published by ELSTAT. The increase was driven primarily by a 12.4% annual rise in the electricity supply index, as well as a 2.7% rise in manufacturing.

Analysis published by Eurobank suggests that fixed investments in the Greek economy need to grow at a pace equivalent to 7% over the economic growth rate for a decade to catch up with the rest of the eurozone.

Greek wholesalers and retailers lost an estimated €10 billion in income in 2020 according to the annual report of the Hellenic Confederation of Commerce and Entrepreneurship (ESEE). Large wholesalers and retailers increased their market share at the expense of smaller businesses, to reach 89% and 57% of their respective sectors.


Six potential bidders are lined up for the sale of 67% of the Heraklion Port in Crete, as privatisation agency HRADF launched the tender on Monday. The deadline for expressions of interest is July 30, while the tender is expected to be completed by early 2022.

The number of potential bidders for 49% of power distribution network manager HEDNO (DEDDIE) has been reduced to nine after China South Power Grid and China Three Gorges were excluded due to ownership conflicts. The remaining suitors include Blackrock, British Columbia Investments, French fund Ardian, KKR, Macquarie, First State Investment, CVC, Italian fund F21 and Oak Hill Advisors.

The "White Dragon" of Western Macedonia is competing with four other programs from the EU. Copyright: Jenson /


Greece’s “White Dragon” hydrogen plan is seeking inclusion in the EU’s list of Projects of Common Interest. The €2-4 billion project is led by natural gas company DEPA, along with DESFA, HELPE, Motor Oil, Mytilineos, Cenergy, TERNA and Polish company Solaris, along with research partners the National Centre for Scientific research “Demokritos” and CERTH (the National Centre for Research and Technology). The project’s aim is to turn the former coal-generating region of Western Macedonia into a hydrogen hub utilising the existing interconnections to the Western Balkans.


The European Commission has given the green light to Hercules II, extending the state guarantee scheme for NPL securitisations for a further 18 months. The first phase of the Hercules scheme enabled Greek banks to shed €31.35 billion of bad loans during the course of 2020.

Alpha Bank’s shareholders approved the new corporate structure which will see the banking activity transferred to a new 100% subsidiary, New Alpha Bank. The new structure will allow management to speed up the reduction of the bad loan burden, which will involve three transactions worth a total of €3.3 billion euros in 2021, bringing NPEs down to single digits by the end of 2022.

Piraeus Bank’s AGM approved the proposed share capital increase, which will give preference to existing shareholders up to the level of their current holding. The bank also confirmed plans to proceed with its Sunrise Plan which will result in securitisations worth a total of €19 billion when complete.

Stock Market

The ASE general index closed the week with gains of 3.07% at 891.69 points, regaining the December 2019 levels, while capitalisation increased by €1.5 billion.

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