GIG Economic Bulletin – December 21, 2020

This week saw the launch of Greece’s 5G networks come a step closer to fruition after the first round of licenses were awarded, while new investments were announced in electric vehicles and battery manufacturing.

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The development of Greece’s 5G network crossed a major milestone on Wednesday after licenses were awarded to OTE, Vodafone, and Wind, with the Greek state raising €372 in licensing fees. New investments focused on R&D and the country’s energy transition were announced last week targeting the manufacturing of electric vehicles and lithium-ion batteries. Meanwhile, HEDNO (known as DEDDIE in Greek) is working on a €2.3 billion investment plan for the 2021-2025 period.


The Bank of Greece’s (BoG) Monetary Policy report sets the baseline expectation for GDP in 2020 to clock in at a -10%, while the EU Recovery and Resilience Fund (RRF) is seen to boost GDP by as much as 2.3% per year over the 2021-2026 period. The BoG expects baseline economic growth of 4.2% and 4.8% over the next two years. The report is reassuring on the debt front, despite its rise as a stock of GDP, however it notes that it has left little fiscal room for the authorities.

The seasonally adjusted wages index produced by the Hellenic Statistical Authority (ELSTAT) was up 3% in in Q3 2020 compared to the same period last year, but registered a 1.5% drop on a quarterly basis.

The employment balance was negative in November with 29,933 more jobs lost than created according to Labour Ministry figures. The first 11 months of 2020 had a positive balance overall, with 90,887 more hirings than dismissals; however, 40,403 fewer jobs were created compared to the same period last year.

ELSTAT’s non-seasonally-adjusted employment figures showed Q3 unemployment at 16.2%, from 16.7% in Q2 and 16.4% a year ago (with the usual caveat that workers on suspended contracts due to the pandemic for less than three months are counted as employed).

Industrial turnover fell by -14.4% Y-o-Y in October, marking the ninth consecutive decline in as many months according to ELSTAT. Meanwhile, the manufacturing PMI slipped to 42.3 points in November from 48.7 points in October – the sharpest deterioration since Markit started reporting the metric in 1999.


The Public Debt Management Agency (PDMA) is widely expected to make a new market foray in Q1 2021, with a 10-year bond being viewed as the most likely option, while longer maturities are not being ruled out. The borrowing plans for 2021 run to €12 billion in three to four issues.


A study by EY places Greece high up in the rankings as a prospective investment destination, while the funds from the Recovery and Resilience Facility (RRF) are seen as a potential catalyst for Greek growth, as well as a drawer of investments. In addition, ratings agencies see a path towards further upgrades that will bring Greece back to investment grade over the medium term, adding to the country’s attractiveness for international investors.

German electric car maker Next.e.GO announced that it will be investing €100 million in a manufacturing plant and an R&D campus in Greece. The investment is expected to create 1,000 new jobs, with an additional 5,500 positions in the supply chain, while the production capacity will be between 30,000-45,000 cars per year.

Electric car Copyright: Buffaloboy / Shutterstock


The government has appointed an expert committee tasked with developing a national hydrogen strategy to be published in the coming year.

Distribution network manager HEDNO (DEDDIE) has put out to consultation an ambitious €2.3 billion investment plan for the period 2021-2025. The plan’s objectives include boosting the resilience and security of the power distribution networks, as well as introducing dynamic pricing and remote metering.


The licensing of the first 5G frequencies was completed on Wednesday, with the Greek state raising a total of €372 million in licensing fees from bidders Cosmote, Vodafone and Wind. With the first 5G networks slated for deployment in March 2021, the government expects up to 69,000 new jobs by the end of the decade, linked to the transition to the new technology, with added value to the economy reaching as much as €12.5 billion.

Greek technology company Sunlight, part of the Olympia group, is planning to invest in establishing additional R&D capacity in Greece, as well as a production unit in Western Macedonia for its advanced technology lithium-ion batteries which are used in electric vehicles. The investment will total €105 million, €49.9 million of which will come from EU funds.


NBG will shortly proceed with the securitisation of €6.1 billion of bad loans guaranteed by the state-backed Hercules scheme, under the codename Frontier. Following the transaction, NBG will have reduced its NPEs by 60%, and mortgage NPEs specifically by 80%.

Greek bank deposits are growing as households increase their savings due to the uncertainties triggered by the pandemic. Deposits were up by €12.8 billion, or 8.9%, in the period between January and October 2020, versus the same period in 2019. Likewise,

household deposits rose by €5.3 billion, or 6%.

Credit from Greek banks has not risen at the same pace as the liquidity made available under Covid emergency measures, according to BoG head Yannis Stournaras. The stock of credit to the private sector has remained virtually unchanged up to the end of September at €145 billion, despite €40 billion extra liquidity from the ECB and €3.5 billion of loan guarantees offered to businesses by the Hellenic Development Bank.

Covid-19 measures

The government has added €3 billion for economic support measures on top of the €4.5 billion earmarked in the 2021 budget. Steeper rent discounts for stricken businesses and another round of tax advance refunds are on the cards, as the Finance Ministry foresees a tough start to 2021 because of extended pandemic lockdowns over the holidays.

Stock market

The ASE general index broke the barrier of 800 points to close at 800.06 on Friday, with 2.69% weekly gains. The banking index closed the week up by 4.01%.

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