Greece Economic Forecast

Greece Economic Outlook

December 20, 2019

The robust expansion in Q2—with annual growth hitting an over one-decade high—proved to be short-lived as the economy lost steam in Q3 on disappointing domestic demand. Although both household and capital spending rebounded modestly, a slip in government expenditure and a marked drawdown in inventories dragged on growth. Buoyant export growth, however, helped cushion the overall slowdown. Looking ahead, activity seems to have remained somewhat restrained, as suggested by industrial production slipping in October and the manufacturing PMI averaging lower in October–November from Q3. In other news, in late November, the government concluded an early repayment of EUR 2.7 billion of expensive loans to the IMF, while on 12 December, Parliament approved a scheme to allow banks to shed EUR 30 billion of sour loans through securitization, in a bid to encourage more lending to spur growth.

Greece Economic Growth

Although the recovery is expected to gather pace next year, growth will remain only modest. A pick-up in domestic demand, mainly supported by stronger private consumption amid continued labor market improvements, should drive the overall acceleration. Slowing Eurozone demand and increased competition to the vital tourism industry are key external headwinds to the outlook. FocusEconomics panelists see GDP expanding 2.1% in 2020, which is up 0.2 percentage points from last month’s forecast, and 1.9% in 2021.

Greece Economy Data

2014 2015 2016 2017 2018
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 %)-4.31.0-1.30.41.6
Consumption (annual variation in %)-2.70.8-0.30.10.9
Investment (annual variation in %)-8.3-4.60.64.69.4
Exports (G&S, annual variation in %)1.67.72.8-1.96.9
Imports (G&S, annual variation in %)-3.37.70.41.27.4
Industrial Production (annual variation in %)-3.2-1.92.32.63.9
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)-13.2-3.6-5.60.50.7
Public Debt (% of GDP)177179176179176
Inflation Rate (HICP, annual variation in %, eop)-1.8-2.50.40.31.0
Inflation Rate (HICP, annual variation in %)-0.9-1.4-1.10.01.1
Inflation (PPI, annual variation in %)-0.9-1.2-7.2-5.75.3
Policy Interest Rate (%)-  -  -  -  -  
Stock Market (annual variation in %)28.1-28.9-23.62.024.7
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

Value Change Date
Bond Yield1.910.76 %Jan 01
Exchange Rate1.120.65 %Dec 31

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