GIG Economic Bulletin – May 4, 2021

Greece gears up to receive its first (Recovery and Resilience Facility) RRF funds this summer and plans two bond issues in the coming months, while the positive economic outlook prompted S&P to upgrade all four systemic banks.

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On the back of a recent upgrade of the Greek sovereign by ratings agency S&P, the credit worthiness of Greece’s four systemic lenders was raised by a point last week by the agency. In the meantime, the country is planning to issue two more sovereign bonds in May and June, and RRF funds equivalent to €4 billion are likely to be disbursed in August.


Greece’s Medium-Term Fiscal Strategy (MTSF) contains a revised economic growth estimate of 3.6% for 2021, followed by a rebound of 6.2% in 2022. Official forecasts see investments growing at a rate of 7% in 2021 and an impressive 30.3% in 2022, while unemployment is expected to drop to 10.5% by 2024 largely thanks to the RRF. The government’s objectives include banks achieving single-digit NPEs by the end of 2022, and Greek bonds regaining investment grade by H1 2023.

Greeks’ household disposable income rose by 0.8% Y-o-Y in Q4 2020. However, final consumption fell by -8.9% over the same period, according to figures from the Hellenic Statistical Authority (ELSTAT).

Retail sales turnover dropped by -3% in February, while the corresponding volume index fell by -1.8% according to ELSTAT.

The European Commission’s economic sentiment for Greece rose by 1 point M-o-M in April to 97.9, according to the European Commission’s index. The EU average stood at 109.7 points, after a 9.8-point rise.

March marked another month of positive deposit flows according to the Bank of Greece (BoG). €1.66 billion flowed into Greek banks bringing total private sector deposits to €164.8 billion. The level now exceeds that of September 2014, meaning that banks have finally recovered the deposits lost in the bank run which started at the end of that year.

Credit growth slowed to 2.9% in March, compared to 3.7% in February according to the BoG. The second month of positive lending flow was driven primarily by the continuing expansion in corporate lending.


After officially submitting Greece’s recovery plan to the European Commission, Alternate Finance Minister Theodoros Skylakakis said that Greece would have to absorb double its usual annual amount of EU funds and increase private sector investments by 30% to make the most of the RRF package. Greece stands to receive €6 billion annually up to 2026, starting with an initial disbursement of €4 billion which is expected in August.


Greece plans to issue two more sovereign bonds in May and June of this year according to Finance Minister Christos Staikouras, with options including a reopening of the 10-year issue from January, or new 5- or 7-year issues.


The latest tally from the Bank of Greece shows that 1.5 million Germans visited Greece in 2020, along with 1.06 million visitors from the UK, 663,000 from Bulgaria and half a million from France. Revenues from Germany totalled €1.13 billion, followed by the UK with €755.8 million and France with €367.4 million.

Uncertainty about the coming summer season, together with strict travel policies adopted by key markets of origin such as the UK and the U.S. is said to have led hotels without binding contracts or heavy debt obligations to consider staying closed this summer. The liquidity gap in the hospitality sector stands at €900 million, while last year’s revenues totalled €1.8 billion, down from €8.4 billion in 2019.


A study by think tank DiaNEOsis estimates that the investments in the energy sector foreseen in the national recovery plan could add €2.6 billion to Greece’s GDP over the coming decade, bring €1.2 billion in additional public revenue and create 35,000 new jobs.

Green energy. Copyright: hrui /

Tax Incentives

Recently introduced tax incentives have motivated 90 millionaires and 180 pensioners to move their tax residence to Greece, and resulted in €4.5 million in revenues for the state.


Ratings agency S&P upgraded all four of Greece’s systemic banks, on the expectation that the positive economic outlook will increase investors’ appetites for troubled assets, which will in turn help the banks to clean up their balance sheets. Piraeus Bank was given a B rating, with the rest of the banks rising to B+.

Eurobank received €1.3 billion in offers for its 6-year senior preferred bond issue, which enabled it to raise €500 million euros with a coupon of 2% and a yield of 2.125%.

Stock Market

The ASE general index closed at 910.37 points to end the week up 1.2% on Thursday, with Friday being a bank holiday. Overall, the index racked up 5.24% monthly gains in April, while it has gained 12.5% in the year to date.

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