GIG Economic Bulletin – December 7, 2020

Disappointing figures on Q3 growth failed to dent the stock market rally, while the government released its much-awaited Digital Transformation Bible as part of the drive to reshape the post-pandemic economy.

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While Greece’s economic growth in the third quarter lagged behind its eurozone counterparts, the ASE made considerable gains, owed to a rally in bank stocks. The government’s recently unveiled Digital Transformation Bible – backed by €6.4 billion in funding – aims to fast-track Greece’s digital transformation. Meanwhile, the IMF’s Second Post-Programme Monitoring Discussions with Greece underlined the sustainability of Greek debt in the medium-term, yet expressed concerns for the long-term.


Greek GDP rose by 2.3% in Q3 on a quarterly basis, driven mainly by a 14% increase in consumption. The recovery lagged behind the rest of the eurozone, which recorded growth of 12.7%, while the latest data from the Hellenic Statistical Authority ELSTAT show an annual contraction of -11.7% for the Greek economy compared to Q3 2019.

The OECD has revised its forecast of the Greek economy to a -10.1% recession in 2020 followed by 0.9% growth in 2021, picking up pace to 6.6% in 2022.

Bank of Greece (BoG) Governor Yiannis Stournaras told the Greek Economic Summit that an average growth rate of 3.5% over the next decade was not out of reach for the Greek economy, given it is able to absorb and deploy the Next Generation EU pandemic relief funds. The BoG plans a number of innovation-boosting moves, including the creation of a Regulatory Sandbox – the 8th in the EU – to allow businesses to test new products and business models.

In its Second Post-Programme Monitoring Discussions with Greece, the IMF found public debt to be sustainable in the medium-term, yet expressed some concern regarding its long-term viability due to the potential impact of the pandemic on economic growth. The main risks, according to the IMF, stem from the potential derailment of a rebound of the tourism sector, along with the deterioration of banks’ balance sheets. Its baseline scenario sees debt at 208% of GDP in 2020 and 199% in 2021. However, in an adverse scenario, this could rise to 216% in 2021 while staying above 200% through 2026.

Manufacturing PMI fell to 42.3 points in November from 48.7 points in October thanks to a notable drop in new order inflows as European countries went back into lockdown, according to index compilers Markit.

Retail sales fell by -3.5% in September Y-o-Y, mainly due to a -22% decrease in sales of automotive fuel.

Almost two thirds of Greek businesses, responding to an HSBC survey, plan to increase their investments in the coming year primarily in the areas of digitisation and marketing with a focus on exports. One in three said that they expect to return to pre-pandemic profit levels by the end of 2021, with the remaining two thirds not expecting a recovery until the end of 2022.


The government launched its Digital Transformation Bible, an ambitious roadmap consisting of close to 450 projects backed by €6.4 billion of funding, to speed up the digitisation of the public and private sectors and boost Greece’s digital readiness. The priorities range from infrastructure investments to digital education programmes intended to ready Greece for the “4th industrial revolution”.

Digital Governance Minister Kyriakos Pierrakakis recently launched Greece’s strategy for the transition to Digital Greece. Copyright: Peshkova / Shutterstock


NBG reported a net profit of €137 million in Q3 2020, more than double its net profit of €58 million in Q2. Over the first nine months of the year NBG registered net profits of €602 million, compared to €452 million over the same period in 2019.

NBG announced plans to sell Ethniki Insurance and reduce NPEs by €6 billion through securitisation. Project Frontier will reduce the bank’s €10-billion stock of bad loans by over one half, while NBG will be able to absorb the losses from securitisation through its profitability that in the nine-month period reached €602 million.

Stock market

The ASE general index closed the week up 6.56% at 784.95 points, after 11 consecutive sessions of gains. The banking sector was up 18.3% on a weekly basis. An impressive rally in bank stocks saw the sectoral index gain 99% over the five weeks since November 2.

Covid-19 measures

The national lockdown has been extended until December 14, due to persistently high case numbers accompanied by pressure on the healthcare system. Very limited exceptions have been granted for seasonal retail.

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