GIG Economic Bulletin – March 8, 2021

Better-than-expected GDP figures show a recession of -8.2% for 2020, after the economy grew 2.7% in the final quarter buoyed by a smaller trade deficit.

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Provisional 2020 GDP results announced by ELSTAT show an improvement on the government’s initial estimates, with a -8.2% contraction of the economy. €3.7 billion in corporate bond issues are expected in March in response to the low cost of borrowing, while international investor interest remains high in sectors including energy, privatisations, pharmaceuticals, and commercial real estate.


The Greek economy contracted by -8.2% in 2020 according to provisional GDP figures released by the Hellenic Statistical Authority (ELSTAT). The figure is an improvement on the estimated -10.5% drop included in the 2021 budget. GDP grew an estimated 2.7% Q-o-Q in Q4 2020, mainly driven by a 31.8% rise in exports of goods and services and a -3.6% decline in imports.

Greece’s manufacturing PMI dipped from the borderline reading of 50 points in January to 49.4 points in February – where values over 50 indicate overall improvement – according to index provider Markit.


The ESM gave the necessary clearance for Greece to make a second prepayment of between €3.1 and €3.3 billion to the IMF, following a first payment of €2.7 billion made in November 2019. This will leave €1.5 billion debt outstanding to the IMF.

Covid-19 Measures

The end of the lockdown will bring a switch to “a la carte” support measures for the economy targeted more precisely at businesses which have suffered the greatest loss of revenue, according to the Finance Ministry. Already, criteria for access to some support measures, including tax advance refunds and furlough, are tightening as the government seeks to rein in public spending.

Half of Greece’s salaried labour force – 1.13 million individuals in salaried employment – were on some form of furlough during 2020. A total of €2.4 billion was paid out in furlough schemes between March 2020 and February 2021, according to data released by the Labour Ministry.

Over the past 12 months, €27 billion have been spent on supporting the economy, with the Greek state raising €13 billion from the markets during the pandemic. The latest lockdown extension to March 16 is expected to cost an additional €1.2 billion, according to government estimates.

Real Estate

Lamda Development, the company behind the emblematic Hellinikon redevelopment project, say they have received 15 non-binding offers for the two high-rise towers planned for the site, with a second round of offers expected at the beginning of May. The offers came mainly from foreign investors, including household names in real estate with no presence in Greece.


Significant interest has been expressed by potential foreign bidders in the ports of Kavala, Alexandroupoli, and Igoumenitsa this week, which marked the deadline for the submission of legal documentation prior to the shortlisting for final offers. The next stage in the tenders for 67% ownership of Alexandroupoli and Igoumenitsa, along with the concession to a dock in Kavala, is expected to conclude in four months.


In addition to the major investments implemented by Pfizer in Thessaloniki, close to €1.5 billion will be invested by domestic and global pharmaceutical companies in Greece by 2024 in projects including 12 new factories and 17 R&D centres, according to figures presented by the Panhellenic Pharmaceutical Association.

Greek pharmaceutical are expected to invest €600 million by 2025, and create 2,000 new jobs. Copyright: Gorodenkoff /


Over €800 million are due to be invested in natural gas networks over the next 5-10 years according to strategic plans by gas grid operator DESFA and gas distributor DEDA. The plans will extend delivery of natural gas to more regions of Greece, and will also ready the networks for “green” fuels including hydrogen and methane.

Following VW’s strategy for Astypalaia, a second “green island” plan is in the offing by French automotive giant PSA Groupe in partnership with Vinci Energie and Akuo Energy Greece, who have signed an MoU with the Ministry of Energy. In addition to renewable electricity generation, storage, and zero carbon road vehicles, the plan will extend to sustainable sea transport.

Greece, meanwhile, is to receive €700 million in EU funding under the Fair Energy Transition for All (FETA) programme to support the green electrification of its islands.


Four potential bidders have emerged for NGB’s €6.1-billion Frontier portfolio. The portfolio consists of 190,000 non-performing loans from 80,000 customers (77% mortgages, 18% business loans and 5% consumer loans), 90% of which are backed by property collateral.

Piraeus Bank has signed a binding agreement with Swedish loan servicer Intrum AB for the securitisation of the Vega NPL portfolio which has a gross value of €4.9 billion. Piraeus is awaiting approval for the inclusion of Vega in the Hercules guarantee scheme.

Piraeus Bank is expected to follow its Vega and Phoenix securitisations with a new project, dubbed Sunrise, which will have a gross book value of €7.2 billion and which the bank hopes to include in the state-backed Hercules II programme, and another €3.2-billion securitisation in 2022.

Following the Galaxy securitisation, Alpha bank drew €500 million through the issue of subordinated Tier 2 bonds at 5.5% interest. The issue was oversubscribed twice, while 75% of the investors were from abroad.

Ratings agency DBRS has warned that despite the progress Greek banks have made in reducing their bad loan burden, it will be important to explore other systemic tools in addition to the Hercules APS scheme. Through Hercules the banks have managed to reduce NPEs by €31 billion over 18 months. The Bank of Greece’s “bad bank” proposal is seen as a potential complement to help banks drive their NPEs down to the level of the eurozone average.

Stock Exchange

The ASE general index closed the week up 4.11% at 825.02 points, driven primarily by gains of 12.5% in the banking sector. The gains took the index into positive territory for the year-to-date.

At least seven listed companies (including PPC, Piraeus Financial Holdings, Mytilineos, Aegean Airlines and Ellaktor) are planning to take advantage of the low cost of borrowing with new bond issues in March for amounts totalling €3.7 billion. The first moves were made by Alpha Bank (above) with €500 million, and Motor Oil with €200 million of new corporate debt.

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