GIG Economic Bulletin – September 28, 2020

Recent economic figures confirm the impact of the pandemic on tourism, with most forecasters now expecting the Greek economy to shrink at least -7.5% by year’s end. However, pockets of resilience are emerging in real estate, technology, and infrastructure.

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The Greek real estate market shows resilience in the second quarter, despite the challenging economic landscape, while tourism revenues are down 85% compared to 2019. A tightening of precautionary measures follows a steady increase in confirmed COVID-19 cases, particularly in the region of Attica. Meanwhile, the Greek government receives representatives from the U.S.’ International Development Finance Corporation to discuss strategic investments in maritime infrastructure, energy, and technology.


The current account deficit over the period between January-July shot up to €7.9 billion, from €2.7 billion in the same period of 2019, largely due to the contraction in the services surplus. This was counteracted only by a decrease in the deficit of the goods sector.

The Bank of Greece (BoG) has revised its outlook for 2020 to a -7.5% recession, from its previous forecast of -5.8%. Debt is expected to exceed 200% of GDP, although the BoG notes that medium-term debt sustainability is assured with gross financing needs kept well below 15% of GDP.

A forecast published by Citi put the contraction at -9% for 2020 (from a previous -7.1% prediction), followed by 3.9% growth in 2021 (which was previously forecast at 3.7%), while NBG expects a -7.5% recession in 2020.


The Greek authorities tightened precautionary measures in a number of areas where the number of COVID-19 cases has been increasing steadily, including Athens, which is at the epicentre of the recent resurgence in infections. The measures include a midnight curfew on all retail with the exception of pharmacies and petrol stations. Average daily cases exceeded 300 in the past week, accompanied by an increase in ICU admissions and fatalities. However rumours of an impending second lockdown appear to have been dismissed for the time being, while the prime minister has called on citizens to show responsibility and abide by existing measures.


The Public Debt Management Agency’s (PDMA’s) planning for 2021 includes 3-4 major issues with the aim of raising €8-10 billion from the markets, with a total borrowing target of €14-15 billion. The main goal of the PDMA’s strategy is to maintain a steady presence in the markets rather than to cover spending needs.


July’s travel balance came to just €516.4 million, compared to €3.47 billion a year ago, marking a Y-o-Y decrease of -85%. Foreign arrivals were down by -84% to just 828,200 visitors, though expenditure by trip rose by 8.8% to €696.70. Visitor numbers from Germany fell by -72%, while arrivals from France and the UK declined by -81.5% and -90.4%, accordingly, based on the latest figures from the BoG.

The impact of the pandemic on tourism could see the Greek economy shrink by -10% according to analysis by the Greek Tourism Confederation. In 2019 tourism’s direct contribution to GDP reached 12.5%, with the sector’s indirect contribution raising the figure to between 27.5% and 33%. In 2020, tourism revenues are expected to reach only 20% of the sector’s contribution in 2019.

Traffic on passenger ferries was down between -37% and -40% in August and -50% and -60% in September, making it almost certain that the sector will require further government support going into the winter months. Revenues are expected to be down by -45% for 2020, from €750 million to around €450 million. A total of €35 billion have been secured to subsidise ferryboat services through September.

Real estate

Property prices defied the lockdown to rise 4.1% in the second quarter on a Y-o-Y basis. In the first quarter, prices increased by 6.6% Y-o-Y, while over the entire 2019 prices increased by 7.2%.

Athenian coast, Greece. Copyright: Aerial-Motion / Shutterstock


The national telecoms commission launched auctions for four national 5G frequencies on September 24, with a completion date of December 21. Cosmote, Vodafone, and Wind are the three telecoms players expected to join the bidding, which is expected to raise €367.3 million.


Six Greek start-ups, including Omilia, [tile]DB and Netdata, raised a total of $82.2 million from domestic and international investors in the midst of the pandemic, proving the vitality of the sector in a difficult economic climate. The total raised by Greek start-ups in 2019 reached €150 million.


The Greek government welcomed representatives of the U.S.’ International Development Finance Corporation (IDFC) to discuss a series of potential strategic investments including the Elefsina Shipyards, and the ports of Alexandroupoli and Kavala. In addition, investment partnerships were discussed in other areas, including energy and technology.

Stock market

The ASE general index fell by -6.58% in the last week of trading, closing at 617.90 points. Losses were particularly heavy in the banking sector with a decline of -8.4% and in large caps, which lost -6.58%. Good news on de-escalation with Turkey was drowned out by rumours of a second lockdown which weighed heavily on investor sentiment, ushering in a new phase of uncertainty.

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