GIG Economic Bulletin – July 13

Sobering economic data capturing the effect of the pandemic and the threat to the tourist season from a resurgence of infections in neighbouring countries dominate news headlines, while on the positive side deals are progressing in privatisations, banking and energy, and a long-term strategic vision for the economy is taking shape

United Against Covid-19Economic BulletinNewsInsights
U.S. based ONEX concludes deal for the acquisition of Greece’s Elefsina Shipyards, and a consortium of international energy majors including France’s Total, the U.S.’s ExxonMobil and Greece’s HELPE announce the initiation of seismic exploratory activities offshore Crete. Six funds express interest in the purchase of Alpha Bank’s loan servicing arm Cepal and the securitisation of the bank’s Galaxy portfolio of NPLs. Meanwhile, Lamda Development is expected to issue a €320-million corporate bond this week.


The European Commission’s Summer Forecast predicts that Greece’s economy will contract by -9% in 2020, in a slightly more optimistic revision of its earlier forecast of -9.7%. However, the rebound in 2021 is forecast to be smaller, at 6% GDP rather than 7.9%. This is in contrast with other Southern European economies which are expected to experience a sharper downturn in 2020 than previously expected, combined with slower growth in 2021.

The Foundation for Economic & Industrial Research (IOBE) revised its economic forecasts to reflect more pessimistic assumptions, with this year’s recession now expected to weigh in between -7.5% and -10.5% of GDP. Unemployment is expected to rise to 19-20%. The industry think tank warned that without a realignment of the country’s economic model it will be very hard to make up the lost ground in subsequent years.

Hirings exceeded departures by 37,568 in June, making it the second highest positive balance for June since 2001. Accommodation and catering services accounted for two thirds of new jobs, registering the delayed start of the tourist season. The employment balance was positive over the first six months of the year, however around 250,000 fewer jobs were created compared to the same period last year.

Seasonally-adjusted unemployment came to 15.5% in April, up from 14.5% in March. The unemployment rate more than doubled from March in Crete and the Aegean islands due to the regional economies’ high dependence on tourism, while the number of people now classified as economically inactive ballooned nationwide due to the lockdown.

The Organisation for Economic Co-operation and Development’s (OECD) employment outlook sees unemployment rising by 2.1 percentage points in 2020 and 0.4 percentage points in 2021 in a single hit scenario. In a double hit scenario, which envisions a second wave of the pandemic, unemployment is expected to rise by 2.3 percentage points in 2020 and 0.8 percentage points next year.

Greek exports shrunk by €1 billion, or -32.7%, in May compared to the same month last year due to the lockdown and border restrictions. The contraction was particularly severe in exports of petroleum products. The balance of trade deficit also shrunk by -47.7% as imports fell at a higher rate.

Inflation was negative for a third month in a row in June at -1.9% YoY using the EU-harmonised index. The Consumer Price Index fell by -1.6% YoY. Transport and housing costs fell the most, however, increases were recorded in food and non-alcoholic beverages.

The Industrial Production Index (IPI) fell by -7.5% YoY in May after a drop of -10.2% in April. The IPI fell by -4.2% in the first five months of the year compared to the same period in 2019, with manufacturing, mining, and quarrying leading the trend.

National development strategy

The Committee of Wise Men under Nobel-winning economist Sir Christopher Pissarides has submitted a 100-page proposal to Prime Minister Kyriakos Mitsotakis for the transformation of the Greek economy over the next 10 years. The plan includes a number of specific proposals designed to reorient the country’s productive model from reliance on imports and consumption towards innovation and technology. Reform of the taxation system and pensions, and radical changes to the justice system, a shake-up of education and employment, and a focus on technology and green development are among the headlines of the vision presented in the document.


As Greece prepares to welcome tourists from the UK on July 15, Tourism Minister Harry Theoharis hosted a web conference of 12 specialist tour operators to discuss a strategy to appeal to high-end segments of the market. Sailing, gastronomy, villa rentals and outdoor activities are some of the areas of focus for what is seen as a demanding but lucrative market.

Athens International Airport Copyright: Tony_Traveler85 /

A survey conducted by GlobalWebIndex (GWI) on behalf of the research arm of the Greek tourism confederation INSETE showed potential travellers from Greece’s main tourism markets have a strong preference for staycations (holidaying within their own country or region). The portion of respondents who said they would consider a European holiday in 2020 did not exceed 25% in Germany and the UK, 13% in Italy, with only 11% of U.S. based travellers being open to long-haul travel over the next 12 months.

The president of the Greek tourism confederation SETE, Yiannis Retsos, has echoed recent forecasts that the 2020 tourist season will bring in €4-5 billion euros in an optimistic scenario, which equates to 20-25% of last year’s income. However, Retsos is optimistic that long-term investment in the sector will continue, as there is an over-abundance of liquidity with new investors ready to step forward to transform Greece into a mature, high-quality, safe destination for visitors.

Due to increased infection rates noted in neighbouring countries, Greece introduced additional restrictions on land crossings via Bulgaria. As of July 14, visitors on non-essential business arriving at the northern border crossing at Promachonas will be required to show a negative Covid-19 test dated within 72 hours of travel.


The consortium of Total, ExxonMobil and HELPE which was awarded the hydrocarbon exploration concessions offshore of Crete plans to begin the first phase of seismic exploration in September, according to plans presented to the Environment and Energy Ministry.

Legislation submitted to Parliament on Friday aims to encourage the uptake of electric vehicles. A combination of tax breaks and a so-called “ecological bonus” promise to reduce the average purchase price of electric cars by 25% and electric bikes by up to 40%.


Six bidders have emerged in the first stage in the sale of Alpha Bank’s loan servicing arm Cepal and the securitisation of the bank’s Galaxy portfolio of non-performing loans. Among the funds submitting non-binding bids are PIMCO, Bain Capital, Cerved Group and a joint venture between Elliot Management and Credito Fondiario. The conclusion of the deal is scheduled for September.


U.S. asset manager BlackSummit Financial Group is expected to bid for the majority stake in the concessions of the ports of Alexandroupoli and Kavala when they are tendered later this year, according to U.S. diplomatic sources. The two ports in northern Greece are seen to have geostrategic as well as commercial importance due to their position in natural gas transhipment networks.

Corporate bond issues

Lamda Development plans to open the book on a new €320-million corporate bond issue between July 15-17. The move follows a successful issue by GEK Terna, and part of the capital raised will be used to fund the Hellinikon development.

Elefsina Shipyards

ONEX has concluded a deal to acquire the Elefsina Shipyards. ONEX will be investing an estimated €400 million over the next 15 years in the rehabilitation of the shipyards funded through a deal with the U.S. International Development Finance Corporation (DFC) and Chatsworth Securities LLC. The rescue deal for the troubled shipyard negotiated under the aegis of Greece’s Ministry of Development aims at developing the facility into a world-class LNG tanker support hub for the eastern Mediterranean, as well as providing services to the Hellenic Navy, the U.S. Navy’s 6th Fleet, and other defence and commercial interests.

5G Fund

The government is planning to create an investment fund to kick-start companies in the 5G services sector. The Faistos Fund will be seeded from a portion of the proceeds derived from the licensing of the 5G spectrum, which will be used to leverage private investment.

Stock market

The ASE general index market closed the week down by -3.88%, leaving the index at 632.97 points after six consecutive days of losses. The banking sub-index recorded a weekly loss of -8.7%, as analysts continue to express concerns over a new generation of NPEs resulting from the pandemic.

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