GIG Economic Bulletin – June 6, 2022

Analysts’ expectations of further inflation and interest rate rises are partly offset by positive indications on the tourism front. The €800-million East to Med fibre optic cable corridor was among the projects discussed at the Greece-Saudi Arabia business forum.

Economic BulletinInsights
Greece hosted the Greek Saudi Business Forum after which a preliminary agreement was signed for the development of the “East to Med Data Corridor,” aiming to link Europe and Asia through a fibre optic data cable. The Greek Parliament approved plans to revive Elefsina Shipyards compiled by the Ministry of Development and Investments and buyer ONEX. Meanwhile, forecasts of rising inflation and increasing interest rates are being buffered by positive performance in the tourism sector.

Macro – Public sector

Eurostat’s harmonised price index for May shot up to 10.7%, from 9.1% in the previous month, indicating that the national CPI is heading towards 12%. Energy products jumped by almost 61%, with food and drinks rising by 11%.

Exports of goods had a solid performance in the first quarter of 2022, reaching €11.43 billion, up by €2.8 billion or 32% year-on-year, with inflation playing a part. Italy remains the top destination with €1.3 billion of goods and a rise of 53.3%, followed by Germany and Cyprus.

IOBE’s economic sentiment index rose to 108 points in May, from 105.1 in April, diverging from the downward trend across the EU. Improved conditions are expected across all sectors, with the exception of construction.

S&P Global’s PMI index for Greece declined from 54.8 in April to 53.8 in May, as a result of high prices slowing down the growth in customer orders.

Systemic lender National Bank of Greece (NBG) sees average inflation this year at 8.5%, with the peak in May-June when it is expected to reach 12%. The bank sees strong defences for households and firms, while employment is forecast to rise by 4.5% and unemployment is expected to drop to 11%.

Wood & Company has predicted a recession in Greece and the EU towards the end of 2022 and into 2023, with inflation peaking at 19%. In the baseline scenario, growth in Greece is seen at 3.1% in 2022, 2.5% in 2023 and 2% in 2024.


Bond yields in the eurozone reached multi-year highs as the latest inflation data points towards a tighter ECB policy. The Greek 10-year benchmark surpassed 3.7% intraday, while the 5-year was at 2.47%.

Inward investment

Prime Minister Kyriakos Mitsotakis held meetings in Davos with major corporations including Microsoft, Meta and Google with a view to promoting inward investment.

The Greek-Saudi Business Forum brought together high-level government and business representatives from both countries to discuss investment opportunities in Greece in sectors ranging from RES, logistics, technology and innovation, to agri-food and tourism. The countries are also seeking ways to bolster trade relations and the exchange of know-how and best practices.


The IGB pipeline is set to commence trial operations in the coming week, with a view to starting full commercial operations in early July. The new Mytlineos gas-fired power station in Boeotia is due to start operating in H2 2022.

Ports & Shipping

The plan for the revival of Elefsina Shipyards compiled by the Development and Investments Ministry with buyer ONEX and the U.S. International Development Finance Corporation received approval by Parliament. It foresees immediate investments of $100 million in restarting operations.

Finance Minister Christos Staikouras told a conference on the future of Greek shipbuilding that legislation is on the way that will allow shipyards to be defined as strategic investments for the purposes of fast-track licensing.

Work on the extension of the cruise terminal at Piraeus Port will be able to proceed, after an amendment to the law spells out the requirement for a strategic environmental impact assessment report in accordance with EU legislation.

A study by IOBE for HEMEXPO found that Greek shipping equipment manufacturers contributed €1.32 billion to national GDP in 2020, equivalent to 0.8% of the economy. The sector employed 19,700 people.


Athens International Airport is set to receive 60% more flights from the U.S. and 13% more from the UK compared to 2019, with eight more international destinations added to schedules.

Piraeus Port Authority is expecting 750 cruise ship arrivals in 2022, 66% of which will be home porting. In total, 25 different cruise operators will be visiting Greece this year, more than any previous year.


Privatisation fund HRADF is expected to wrap up a few projects over the summer, namely DEPA Infrastructure, the Alexandroupolis Port, the Igoumenitsa Port, and the storage unit in Kavala. It should also complete the Egnatia Highway and launch the second phase of the Attica Highway.


The logistics sector in Greece increased its turnover from €1.5 billion to €2.19 billion between 2015-2019, while EBITDA in the sector was boosted by 72%, according to a report by KPMG.


An initial deal was signed between MENA HUB, a subsidiary of Saudi Arabian telco STC and Greek telecommunications and satellite applications company TTSA for the creation of the “East to Med Data Corridor”– aiming to develop a fibre optic data cable link between Europe and Asia. The project with an estimated cost of €800 million will be joined by Greek power company PPC and Cypriot telco provider CYTA.

Copyright: NicoElNino / Shutterstock


Eurobank drew €0.5 billion from the markets to honour its MREL commitments. The coupon settled at 4.375%. This is the first senior preferred issue in Greece and Cyprus since December last year, when Alpha had issued a €400-million note. Foreign investors’ participation in the Eurobank issue exceeded 52%.

There was an extension to the submission deadline for binding offers for the bad loans package by PQH, the state body responsible for selling the loans from banks that closed during the debt crisis. The Ariadne portfolio has a book value of €5.2 billion, with a total off book value of €13.9 billion, and its sale is expected to fetch over €700 million.

According to Bank of Greece data, the interest rate on business loans, which total over €1 million, jumped to 3.44%, from 2.63% in March and 2.38% in February.

Stock Market

The ASE general index edged up 0.61% on a weekly basis to close Friday at 896.89 points. Large caps were up 1% while the banking index gained 1.27%.

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