GIG Economic Bulletin – April 26, 2022

An upgrade from S&P brings Greek debt just one step short of investment grade. Better-than-expected fiscal performance in the last few months provides some cushion to absorb high energy prices, while more RES projects look set to get the go-ahead.

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An upgrade by U.S. ratings agency S&P brings Greece one step away from investment grade, while 2022 growth estimates for Greece are being revised down due to the effects of the conflict in Ukraine. The government has launched a consultation on measures geared towards the fast-tracking of licensing for RES projects, and is also examining a mechanism aimed at capping wholesale electricity prices in the wake of a similar model adopted by Spain.


Ratings agency S&P upgraded Greece’s credit rating by one notch to ‘BB+’, while the outlook was revised from positive to stable. Greece is now just one notch away from securing an investment grade with S&P. Explaining its latest decision, the U.S. ratings agency cited more certainty around GGBs thanks to the ECB’s pledge to continue supporting Greek sovereign debt, improvements in the banking sector, the positive impact of RRF funds, and the expected low impact of the Ukraine conflict.

The latest official figures put the 2021 deficit at 1.5 percentage points lower than expected, yielding additional fiscal space of €3 billion, while revenue performance was better than expected by €1.3 billion in Q1 of 2022. The revised SGP deficit target of 2% will make around €750-800 million available in 2022. This is welcome news for the government, which estimates that it would need around €4 billion to fund new support measures for high energy prices through the rest of the year.

The IMF has revised its growth forecast down from 4.6% to 3.5%. Growth in 2023 is seen at 2.6%, while medium-term growth is seen at 1.2%. Inflation is substantially revised to 4.5%, from 0.4% previously.

The adverse scenario that was presented by think tank IOBE in January is now seen as the baseline due to the conflict in Ukraine, with the new estimates for growth at 2.5% to 3%. There is also a more benign scenario that sees growth at 3.5% to 4%.

Around €5.5 billion from the 2014-2020 European Structural and Investment Funds package (known as ESPA Funds in Greece) remain to be used by the end of 2023, leading officials to be optimistic that the absorption rate will be high.

Industrial turnover was up 33.8% Y-o-Y in February according to the Hellenic Statistical Authority (ELSTAT). The monthly increase was 14.4%. The increase is attributed primarily to price rises in both the domestic and export markets.

The deficit of goods and services in the first two months of the year exploded to €5.6 billion, while the oil deficit in February alone was €1.3 billion according to the Bank of Greece (BoG). The current account deficit reached €4.12 billion from just €1.19 billion in the equivalent period of 2021.

Inflation hit 8% in March according to EUROSTAT, compared to 7.4% across the eurozone. Greece had the 8th highest inflation rate in the bloc.

Household gross disposable income increased by 7% in Q4 2021 according to ELSTAT, to reach the highest level since 2013.


The government is starting a consultation on 10 measures to fast-track licensing for RES installations, with the aim of reducing average lead times from 5 to 2 years. The target is to free up projects with a total capacity of 12 GW and a combined budget of €10 billion.

Greece is examining a mechanism aimed at capping wholesale electricity prices modelled after a similar scheme adopted by Spain to protect consumers from price hikes. The plan will be prepared for activation in the event that no EU-wide solution is agreed upon by the end of May.

After TotalEnergies announced their intention to give up their share of the concession on two Crete offshore hydrocarbon blocks, the state hydrocarbon agency HHRM (or EDEY based on its Greek acronym) has revealed steps are underway to bring in new investors. Targets have been established by the Greek government to complete geophysical surveys by the end of 2023 with a view to expediting potential natural gas exploration and production.

A study by the Institute of Energy for Southeast Europe (IENE) claims Greece could become a hydrocarbon exporter, as preliminary explorations indicate natural gas reserves in the order of 2-2.5 trillion cubic metres.

Power company PPC is in talks to acquire start-up Carge as part of its plan to roll out its DEI Blue network of EV chargers. Carge has developed an application which allows drivers to locate and book charging stations.

U.S.-based 547 Energy is in the final stage of obtaining licenses for a number of wind power projects in partnership with ENORA, a subsidiary of ENTEKA. The company is expected to invest €400-450 million in the projects.


The Infrastructure Ministry is paving the way for three major PPP investments in water networks totalling €929.4 million. The projects include dams at Farsala and Chania and the extension of the water supply in Corfu.

The Intrakat-Bouygues consortium has been selected by developer Lamda out of four contenders to build the Marina Tower at Hellinikon.

ERGOSE has signed the contracts on two major projects with a combined budget of €139 million. They include the electrification of the Larisa-Volos and Palaiofarsalos-Kalambaka branches and the construction of a new suburban rail station at Kryoneri. ERGOSE has successfully completed the first stage in the next round of tenders for six projects worth a total €4 billion by shortlisting the bidders for the next stage.

Real Estate

The general construction price index was up 5.6% Y-o-Y in Q1 according to ELSTAT data. For the 12 months comprised between April 2021-March 2022 the increase was 3.6%.

The formal announcement of the tender for the formation of the state property purchase-leaseback body is due by the end of the month. It involves an investment of about €2 billion and the company must have capital of roughly €200 million.


Air passenger numbers were up almost 300% Y-o-Y in March, while flight arrivals were up 82% over the same period. Compared to March 2019, both numbers were short by about 25% according to the Civil Aviation Authority.

Flight reservations over the Easter holidays have matched 2019 levels on both domestic and international routes, according to aviation industry sources.

TUI France plans to bring 100,000 French tourists to Greece this summer, while Aegean will be offering 1 million seats on flights to and from France, 10% more than in 2019.

Aegean is adding 20 new destinations to its schedules, aiming to hit the targets set for 2023, and is upgrading its technical bases.


Piraeus Bank has extended the deadline for binding offers on the €820-million Project Terra property portfolio until the end of June to tweak the architecture of the transaction. Interest in the deal is high, with seven potential bidders already in advanced discussions.

Piraeus Bank. Copyright: Pit Stock /

Piraeus Bank’s business plan aims to double pre-provision profits to €1.2 billion and grow serviced loans to €35 billion. The bank plans to limit operating costs to €200 million, NPEs to 3%, and reduce staff numbers from 9,000 to 6,000.

Stock Market

The ASE general index closed at 949.68 on Thursday for the Easter weekend, having notched up weekly gains of 3.34%. This brings performance for the year to date to 6.31%, reversing most of the losses since the start of hostilities in Ukraine.

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