GIG Economic Bulletin – January 11, 2021

A slight improvement in economic sentiment and a rise in industrial production offer some cause for optimism despite the pandemic, while a boost in economic activity is expected from January onwards with the launch of the first Recovery Fund projects.

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Caspian gas was effectively delivered to Greece via the TAP pipeline in early January, while HRADF has extended the tender for the three regional ports of Alexandroupoli, Igoumenitsa and Kavala until the end of the month to accommodate delays in submissions derived from the pandemic. Meanwhile, the first round of projects funded by the EU Recovery & Resilience Fund are expected to be launched starting in January.


Economic sentiment edged up 0.5 points month-on-month in December to hit 91.5 points, according to European Commission figures. Employment expectations declined to 104.5 points compared to 105.4 points in November, while construction confidence dropped 13 points to -44 points. The services index and retail trade were also down, however consumer confidence rose by 3.6 points to -44.7 points, and industry confidence rose by 2.1 points to -10.3 points.

Private sector deposit flows rose by €3.16 billion in November, compared to inflows of €2.53 billion in October according to the latest figures from the Bank of Greece (BoG). Credit growth in November was up 2.6%. following an increase of 2.5% in October.

Manufacturing Purchasing Managers’ Index (PMI) rose to 46.9 points in December from 42.3 points in November, where an index reading below 50 signals a deterioration according to index compiler Markit. While production has continued to decline because of weak demand induced by the lockdown, the rate of contraction has declined slightly.

Greece’s trade deficit fell by 18% in November on a Y-o-Y basis to €1.37 billion, according to the latest data from the Hellenic Statistical Authority (ELSTAT). Exports totalled €2.63 billion, recording a Y-o-Y drop of 4.2%, while imports amounted to €3.99 billion, showing a drop of 9.4%.

Industrial production rose by 8.6% in November compared to the same month last year, according to the index compiled by ELSTAT, marking the first positive reading in 2020 with the exception of a 0.01% rise in July.

The pandemic has led to a loss of income in the region of -9.6% in Greece according to a recent study by the International Labour Organisation (ILO). The European Commission puts the average figure at -7.3%.

EU Recovery Fund

The first batch of projects funded by the EU Recovery & Resilience Fund are ready for launch in January and February. They include energy efficiency upgrades of buildings, 200 local infrastructure projects, reforestation schemes, and digital transformation projects including the digitisation of the Independent Authority for Public Revenue.


The government is expecting €8 billion of income from tourism in 2021 based on internal studies; the amount represents 40% of 2019 income and a 100% increase from 2020.

Extended lockdowns in some of the biggest markets for Greek tourism, including the UK, have kept advanced holiday bookings for the summer season low at a time of year when hotels would expect to have received around 60% of bookings. Industry participants believe the season will be slow to start, with most hotels not expecting to open before May.

A report by aviation safety agency Eurocontrol anticipates air traffic in Europe to come to around 51% of 2019 levels, while aviation industry sources are predicting that passenger numbers could rise to 60-70% of 2019 figures.

Real Estate

Real estate funds invested €264.8 million in the Greek property market in 2020. The pandemic kept most foreign funds away, while the absence of large property portfolios on the market kept activity low. Around 22.5% of investments went into the logistics sector, which accounted for a larger portion of transactions compared to previous years.

Home sale and rental prices have continued to rise despite the pandemic, with the Spitogatos Property Index showing a 2.7% annual increase in the asking prices for homes in Q4 2020. Rental prices rose by 2.8% over the same period.


The first deliveries of natural gas from the Caspian reached Greece through the TAP pipeline at the beginning of the year. DEPA Commercial has signed a 25-year contract to receive 1 billion cubic metres of natural gas annually from the Shah Deniz II field.


The tender for the three regional ports of Alexandroupoli, Igoumenitsa and Kavala has been extended to the end of January to accommodate delays in bidders’ submissions brought about by the pandemic. On the current schedule, the second phase of the tender will kick off in February, and the process will be completed in the second half of 2021.


At Piraeus Bank, the conversion of €2 billion of Contingent Convertible Bonds (CoCos) into 394.4 million new shares makes the Hellenic Financial Stability Fund (HFSF) – on behalf of the Greek state – the largest shareholder in the bank with 61.3% of share capital. Piraeus is proceeding with its restructuring plan, which includes NPL securitisations worth €15 billion, a €1-billion capital injection, the sale of its POS network, and the issuance of up to €600 million in corporate bonds.

Stock Market

The ASE general index notched up weekly gains of 1.27% to close at 819.27 points despite losses of -3.45% in the banking sector, with investors remaining cautious about the course of the pandemic and the accumulation of non-performing loans.


The national lockdown was extended another week to January 18. Only primary schools, nursery schools, day care, and especial education will reopen on January 11.

Greece reintroduced a 7-day mandatory self-isolation for all arrivals from abroad.

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