GIG Economic Bulletin – January 18, 2021

The economy is bracing for a sharp downturn in Q1 2021 as a result of the extended lockdown, however a rapid recovery is expected to follow in the second half of the year and into 2022.

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While Greece’s economic slowdown in 2020 is forecast to the tune of 10.5%, a 4.5% recovery has been predicted in 2021, starting in the second half of the year, followed by an expansion of 9.5% in 2022. Meanwhile, Amazon Web Services has announced the opening of new Athens office and Greek Prime Minister Kyriakos Mitsotakis has submitted a proposal for an EU-wide Covid vaccination certificate in an effort to accelerate the coordinated reopening of borders.


Estimates of 2020 GDP put the overall recession at somewhat less than 10.5% GDP after a milder-than-expected downturn in Q4. Debt will also be a little lower than 209% of GDP, as debt settled at €338 billion rather than the estimated €340 billion.

Forecasts for the beginning of 2021 are less optimistic, with economists expecting a deep recession due to the January lockdown. The Finance Ministry estimates that a 30% reduction in retail could lead to a 7% contraction for the economy in Q1. However, some forecasters are holding out hope for a rapid recovery in the second half of 2021, with Piraeus Bank expecting the year to close with 4.5% growth, followed by a upturn of 9.5% in 2022.

Deflation reached record levels in 2020, with the December Consumer Price Index (CPI) falling at a rate of 2.3% according to ELSTAT, the second worst reading since 1960. The fall was led by transport, with airline tickets down 26.1%, while lower energy prices also weighed on the index.

The employment balance for December was positive, with 2,116 more jobs created than lost, according to Labour Ministry figures. Across 2020, there were 93,003 more jobs created than lost, however the balance fell 34,641 jobs short of the 2019 balance. October’s seasonally adjusted unemployment held steady at 16.7% from September according to the Hellenic Statistical Authority (ELSTAT), and was also unchanged from a year ago.

The total revenue of companies obliged to submit monthly data was down 8.4% in November compared to the same month in 2019. For businesses closed due to the lockdown, the drop was 51%.


The pandemic is expected to add €10 billion to the stock of bad loans according to figures presented by Bank of Greece Governor Yannis Stournaras at the 8th Banking Forum and Fintech Expo. Stournaras argued that the proposed “bad bank” could take over the new NPLs, along with €30 billion from the existing stock.

Loans managed by servicers are expected to reach €100 billion this year, while planned securitisations will amount to €20 billion, according to the association of servicers.

“Hercules II”, the second round of state guarantees for troubled asset securitisations is ready to go live in the next couple of months, pending approval from the European Commission.


Amazon Web Services announced the opening of a new office in Athens to support the increasing number of companies and public sector entities in Greece moving to the company’s cloud computing platform.

Milan, Italy – August 10, 2017: Amazon web services website homepage. It is a subsidiary of that provides on-demand cloud computing platforms. AWS logo visible.

Stock Market

The ASE general index recorded weekly losses of 3.56% to close at 790.14 points. Expectations of a deep recession in Q1 put the brakes on the end-of-year rally, as lockdowns across Europe put investment decisions on hold.


Greek Prime Minister Kyriakos Mitsotakis has tabled a proposal for an EU-wide vaccination certificate for travellers to speed up the coordinated reopening of borders. The proposal is due to be discussed at the EU summit on 21 January.

The Finance Ministry is planning a new round of measures to support the economy through the latest lockdown extensions, which are estimated to cost the economy over €3 billion a month according to government figures. The total package is expected to reach €13 billion, with the addition of new support tools to be rolled out in January and February including loan moratoria, business loan subsidies, more refunds on tax advances, and a controversial freeze on auctions.

With infection rates stabilising and hospital numbers down, retail is due to reopen on January 18 under a new safety protocol.

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