GIG Economic Bulletin – August 24

With economic indicators continuing to paint a challenging picture of the impact of the Covid-19 pandemic and expectations from tourism revenues further suppressed, government and businesses are preparing for a tough autumn. Investment incentives are being boosted, while banks move ahead with securitisation plans to protect their balance sheets.

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Confirmed COVID-19 cases continue to rise although virus-induced casualties remain relatively low, amounting to 242. With tourism arrivals down 77% in the first half of the year, the latest figures point towards a 10% economic recession in 2020. Meanwhile, the state is set to announce a €5.5-billion economic support package while doubling down on investment promotion efforts.


The latest GDP figures due to be published in September are said to confirm the adverse scenario for the Greek economy, as preliminary numbers reflect a decline in sales in the second quarter (Q2) amounting to €20 billion, representing a -15% Y-o-Y drop. A Q2 recession of -16% GDP would put Greece on track for a recession in excess of -10% of GDP by the end of 2020.

Industrial turnover fell by -3.8% Y-o-Y in June according to the Hellenic Statistical Authority (ELSTAT). June’s figure represents an improvement on the two prior months when the headline figure registered falls surpassing -30%.

July’s Purchasing Managers Index (PMI) dropped to 48.6 points compared to 49.4 points in June, reversing the gradual recovery which had been taking place since the historic low in April.

The European Commission’s economic sentiment figures for July show industry confidence up by 4.8% M-o-M reaching -13.3 points.

Despite a small surge in job creation in July with the delayed opening of the tourist season, employment shrunk significantly over the first seven months of the year according to the latest weekly bulletin published by Alpha Bank, with only 113,300 net new jobs created compared to 281,600 in 2019 and 289,600 in 2018.


New confirmed coronavirus cases have exceeded 200 for several days in the past week, while deaths since the start of the pandemic reached 242 as of August 23. The Greek authorities have imposed measures on several regions and resort areas, including the cities of Athens and Thessaloniki, including mandatory mask-wearing, restrictions on gatherings, and curfews on bars and restaurants.

A number of countries have placed Greece on their COVID-19 watchlists in response to the recent increase in infection rates. Italy and Belgium are commencing mandatory testing on returning travellers from Greece, while the Baltic states and Finland will be imposing a mandatory two-week quarantine.

The government will be unveiling a €5.5-billion package of additional economic support measures in the coming week, which aims to provide breathing space for workers and businesses hit by the pandemic until the end of the year.


Tourism arrivals were down -77% in the first half of the year according to the latest figures released by the Bank of Greece, while receipts fell by -87.5% compared to the same period last year. Just over 2.1 million visitors brought in just €678 million compared to €5.41 billion in 2019.

Cruise revenues will be down -90% in 2020 and will take at least three years to recover from the pandemic, according to the Greek cruise ship owners’ association EKFN.


Public Power Corporation (PPC) has announced a tender for 1,000 electric vehicle charging stations, marking its entry into the Electric Vehicles (EV) services space. The company is set to invest €5.2 million to start building a charging network, which is expected to reach 10,000 stations over the medium term.

A series of incentives for the purchase of electric vehicles will launch in the coming week, targeting individuals and businesses. Individuals will be able to claim up to 20% of the value of fully electric cars, while electric bikes will be subject to a 40% subsidy. Subsidies will be higher for business fleets, with additional allowances foreseen for island-based companies.

PPC to open 10,000 charging stations in the medium term across the country. Copyright: Scharfsinn / Shutterstock


A series of acquisitions in the private healthcare sector coupled with the government’s plans to initiate public-private partnerships, and potential synergies with the insurance sector are prompting a new wave of interest among foreign and domestic players. Recent investors in Greek private healthcare include Luxembourg-based CVC Capital via its subsidiary Hellenic Healthcare Group and BMO Private Equity, while existing players including Oaktree and Farallon remain active in light of emerging opportunities.


The government plans to increase the funds available to promote investments under the new development law, from the original figure of €650 million to €1.15 billion. The backing will be split roughly 50/50 between tax breaks and subsidies for qualifying projects.


All systemic lenders are on course to join the Hercules asset protection scheme, with National Bank of Greece expected to be the latest to apply for state guarantees for its €6-billion portfolio codenamed Frontier. The banks plan to transfer a total of €30 billion of bad loans off their balance sheets by early 2021 using the programme, which will provide them with more breathing space to manage the adverse effects of the pandemic on their loan books.

Stock market

The ASE general index closed the week down -0.187% at 633.27 points, led by selling in the banking sector, with year-to-date losses nearing -31%.

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