GIG Economic Bulletin – April 26, 2021

Greece’s debt to GDP ratio shot up to 205.6% in 2020 as increased borrowing coincided with negative growth – however 2021 forecasts see a rebound in excess of 3.5% in the current year. Meanwhile, a while a surprise S&P upgrade brought the country’s debt rating to BB.

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A surprise upgrade of Greece’s debt rating by S&P to BB bodes well for the future of the economy, while another step has been completed towards the release of the first disbursements of RRF funds. Meanwhile, state utility PPC returns to profitability, industrial conglomerate MYTILINEOS’ green bond is 3 times oversubscribed, and Piraeus Bank’s share capital increase is likely to push the Greek state’s participation in the bank below 30%.


Think tank IOBE sees 2021 GDP growth landing at between 3.5% to 4%, putting it roughly in line with the IMF’s forecast of 3.8% and the European Commission’s 3.5%. IOBE’s forecast hinges on the containment of the pandemic, a smooth vaccination rollout, and the arrival of Recovery and Resilience Facility (RRF) funds, while its adverse scenario would put economic growth at 1.5-2%.

Industrial turnover dropped by -2.4% Y-o-Y in February according to the Hellenic Statistical Authority (ELSTAT), marking the 13th consecutive negative reading. The decline was led by mining and quarrying which experienced a -18% decline, while manufacturing fell by only -2.2%.

The current account deficit narrowed to €840 million in February, from €1.15 billion the same month in 2020. Imports fell by -5.1% Y-o-Y, while exports increased by 9.5%. The travel balance surplus came to just €7.6 million, after experiencing a -89.3% drop Y-o-Y.


Greece ended 2020 with €341 billion of public debt, which together with the collapse in GDP from €183.4 billion to €165.8 billion pushed the debt to GDP ratio up 25 percentage points to 205.6%. The latest official figures released by ELSTAT show an annual deficit of -9.7% of GDP, from a surplus of 1.1% of GDP in 2019.


Ratings agency S&P issued a surprise upgrade on Greek debt, increasing its rating from BB- to BB, which puts it two notches away from investment grade. The rating came with a positive outlook, suggesting another upgrade could be on the cards in the next 12-18 months. The agency forecasts growth of 4.9% in 2020, and 5.8% in 2021.


Societé Generale sees Greece as the biggest beneficiary of the EU’s RRF in terms of the potential contribution of the package to the domestic economy. The first disbursements moved a step closer after the facility was approved by the German courts, and is now awaiting approval from Poland and the Netherlands.


Businesses in the tourism sector do not expect to regain their 2019 footing for another 2-3 years according to a survey by DHR Services and Metron Analysis. Respondents including the top 59 industry executives in Greece and abroad expect revenues to suffer again this season, particularly in urban destinations, with long haul travel, conference tourism, and business travel taking even longer to recover. However, long-term prospects for Greece remain attractive.

U.S. airlines are boosting their schedules with direct flights to Greece this summer, which will bring the combined weekly seats available on flights from the U.S. to 40,000. Greece was added to the U.S. State Department’s level 4 category this week, however officials noted that improving COVID-19 statistics could bring a positive reassessment within weeks.


Around €4.8 billion is to be invested over the next five years in upgrading Greece’s electricity networks, according to plans submitted to the country’s regulator RAE. The investments will be targeted at interconnections between the Greek mainland, Crete, and the Aegean islands, upgrades to the mainland transmission network, smart metering, and undergrounding of the distribution network.

Chalkidiki, Greece Copyright: Ververidis Vasilis /

Public Power Corporation (PPC) returned to profitability in 2020, with profits of €35.2 million, compared to losses of €1.68 billion in 2019. Management credits the improved outcome to restructuring measures adopted in Q4 2019, a drop in gas prices due to COVID, and lower carbon emissions attributed to reduced lignite production.

A “green bond” issued by Mytilineos was more than three times oversubscribed, attracting €1.8 billion in offers for €500 million of senior debt. The yield settled at 2.25%, beating the guide price of 2.5%.


Piraeus Bank’s share capital increase was 3.5 times oversubscribed after a great show of interest from foreign institutional investors. The bank issued 1.2 billion shares across a price range of €1-1.15, and looks set to hit the ceiling of €138 billion. The share capital increase is likely to push the Greek state’s stake in the bank via the HFSF below 30%.


Privatisation fund HRADF has approved seven investment consortia to move to the next phase of the tender for a 67% stake in the Igoumenitsa Port.

Stock Market

The ASE general index edged up 0.1% to close the week at 899.58 points, with large caps capturing weekly gains of 0.09% and banks recording marginal losses of -0.11%.

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