GIG Economic Bulletin – January 25, 2021

With expectations of recovery for Greece now pushed out to the second half of 2021, analysts are increasingly optimistic for one of the strongest rebounds in the eurozone once travel and tourism resume.

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While independent growth forecasts for Greece appear to signal that the country’s economic recovery will not materialise until the second half of 2021, the country is expected to be one of the best performers in 2022, with predictions varying between 5.5% to 6.5% of GDP growth. On the energy front, investments in the development of floating PV parks are gathering momentum, with TERNA and PPC leading the pack.


The economy undershot the original 2020 budget targets by €21.7 billion, ending the year with a €18.2 billion deficit instead of a €3.5 billion surplus. Tax intakes were lower by €9 billion and expenditure higher by €13.5 billion.

The Centre of Planning and Economic Research (KEPE) is forecasting a recession of -10.4% GDP in Q1 2021, followed by 3% growth in Q2. Greek bank analysts’ forecasts for Q1 range between -10.5% and -15%, while they see the year ending with 4-5% positive growth, in line with the official forecast of 4.8% growth.

Longer term forecasts are much more optimistic, with many analysts seeing Greece among the winners of 2022 thanks to the EU recovery funds and the return of tourism. Capital Economics is forecasting 6.5% growth for the year, while Citi predicts 6% growth, and HSBC sees 5.5%, topping EU growth rates.

Recovery Plan

Greece’s plan submitted to the EU Recovery & Resilience Fund has been described as one of the most comprehensive submissions yet by an EU source speaking to Naftemporiki business daily, raising hopes that the country will receive prompt funding for its proposals.

Real Estate

The pandemic put a chill on the real estate market with property transactions in central Athens down -40% in 2020 compared to 2019. Industry insiders also note the lack of inward investment in the sector, but hold out expectations for a recovery in the second half of 2021.


The Bank of Greece’s (BoG) latest financial stability report includes the prediction that Non-Performing Exposures (NPEs) will rise by €8-10 billion due to the pandemic. Around €21 billion worth of loans are currently under repayment moratoria, including 15% of the overall serviced portfolio. The BoG sees the challenges for the banks revolving around dealing with NPEs, the composition of their capital base, and their ability to generate capital internally via profitability in the current climate.

Banks have so far disbursed €7.6 billion in financing supported by the European Investment Bank and the Hellenic Development Bank. A newly-created body, the Liquidity Council, convened for the first time this week with the participation of the Development and Finance ministries, the Hellenic Development Bank, the BoG and the Hellenic Bank Association, with the task of monitoring the flow of funds from the banks to the real economy.


Greek energy producers are investing in the development of floating solar parks, a relatively new renewable energy solution which combines low installation costs with minimal infrastructure and intervention. TERNA has lodged applications for a total 265 MW of solar generation located in three artificial reservoirs with a total investment value of over €170 million, while PPC plans to build up to 50 similar facilities across the country.

According to Greece’s National Energy and Climate Plan, the installed capacity of photovoltaics will be 7.7 gigawatts (GW) by 2030. Copyright: Alessandro Pierpaoli / Shutterstock

Energean increased its extraction footprint outside Greece with a $235 million investment in Egypt’s North El Amriya/North Idku fields as part of a strategy to internationalise its production. The company, which focuses on hydrocarbon extraction, currently draws 4% of its annual production from Greek reserves, with this portion expected to reduce to around 2% once its Egyptian wells come onstream.


Greece came fourth in the European Travel Commission’s regular survey of traveller’s preferences for the coming holiday season. Over half of the survey’s respondents said they plan to travel within the next six months, however industry representatives warn that developments on the vaccine front and rolling lockdowns could affect travel conditions as summer approaches.

Stock Market

The ASE general index closed the week down -1.42% at 778.98 points as trading volumes remained at low levels, and global concern over the new Covid-19 variants made itself felt in Athens.

At the end of 2020, foreign investors controlled almost two thirds of capital on the ASE, owning shares valued at just over €28 billion. Entities registered in Cyprus, the U.S., and the UK are the top foreign owners of Greek equities. However, in the course of the year foreign investors were net sellers, selling shares worth €625 million, while domestic investors were net buyers, picking up shares with a total value of €613 million.

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