Greece Economic Forecast

Greece Economic Outlook

July 23, 2019

In line with what opinion polls had anticipated, the conservative New Democracy party comfortably won the 7 July general election, securing an outright majority in the 300-seat Parliament. Although the newly elected government, headed by Prime Minister Kyriakos Mitsotakis, has proposed a business-friendly policy mix ahead, which could boost investment, the economy’s structural fragilities and authorities’ commitment to strict fiscal targets weigh heavily on the pace of recovery. Meanwhile, available data indicates that the economy’s weak momentum at the start of the year broadly carried over into Q2. April’s rebound in industrial output was short-lived as it contracted again in May. This, coupled with the manufacturing PMI sliding in May–June, points to a loss of dynamism in the goods-producing sector. Moreover, although unemployment fell markedly in April, retail sales contracted and consumers remained broadly as pessimistic in Q2 as in Q1, boding ill for household spending.

Greece Economic Growth

Growth is expected to remain somewhat subdued this year. Recovering private consumption, aided by the recent minimum wage hike, and a rebound in investment, boosted by reduced uncertainty and market-oriented policies, should prop up the overall expansion. Weaker export demand and sour loans burdening the banking system weigh on the outlook. FocusEconomics panelists see GDP expanding 1.7% in 2019, which is unchanged from last month’s projection, and 1.9% in 2020.

Greece Economy Data

Population (million)11.010.910.910.810.8
GDP per capita (EUR)16,41716,35016,32516,36616,737
GDP (EUR bn)181179177176180
Economic Growth (GDP, annual variation in %)-3.20.8-0.5-0.31.4
Domestic Demand (annual variation in %)-4.31.0-
Consumption (annual variation in %)-2.70.8-
Investment (annual variation in %)-8.3-
Exports (G&S, annual variation in %)
Imports (G&S, annual variation in %)-
Industrial Production (annual variation in %)-3.2-
Retail Sales (annual variation in %)-8.1-0.4-1.5-0.61.3
Unemployment Rate27.526.525.023.521.5
Fiscal Balance (% of GDP)-13.2-3.6-
Public Debt (% of GDP)177179176179176
Inflation Rate (HICP, annual variation in %, eop)-1.8-
Inflation Rate (HICP, annual variation in %)-0.9-1.4-
Inflation (PPI, annual variation in %)-0.9-1.2-7.2-5.75.3
Policy Interest Rate (%)-  -  -  -  -  
Stock Market (annual variation in %)28.1-28.9-
Exchange Rate (vs USD)-  -  -  -  -  
Exchange Rate (vs USD, aop)-  -  -  -  -  
Current Account (% of GDP)-2.0-1.6-0.8-1.7-1.8
Current Account Balance (EUR bn)-3.7-2.9-1.4-3.1-3.2
Trade Balance (EUR billion)-20.8-22.3-17.7-18.0-19.8

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Greece Facts

Bond Yield2.620.76 %Jul 31
Exchange Rate1.110.65 %Jul 31
Stock Market900-1.46 %Jul 31

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