Greece Economic Forecast

Greece Economic Outlook

January 30, 2018

Improving macroeconomic fundamentals and cooperation with its creditors is putting Greece on the path to exit its bailout this summer. Economic data has turned brighter after GDP growth slowed in the third quarter. The unemployment rate fell to a new multi-year low in October, the manufacturing PMI rose to the highest level since June 2006 in December and bond yields have tumbled in January. Moreover, in January the government approved the latest batch of creditor-demanded reforms, including tougher legal criteria for strikes and cuts in benefits, paving the way for Eurozone finance ministers to give the preliminary green light to a EUR 6.7 billion cash injection on 22 January. On top of this, EU creditors agreed to begin long-awaited talks on debt relief on the same day, a move vital to ensuring that the economy is on a sustainable path going forward. Public debt is around 180% of GDP.

Greece Economic Growth

The economy finally appears to be on a firm recovery path thanks to an improving labor market and higher confidence. However, a smooth bailout exit is critical to Greece’s outlook, and the performance of the country’s banking sector in upcoming stress tests will be a key indicator as to whether it can continue without external support in the second half of the year. Met the why particular panelists see GDP expanding 2.1% in 2018, unchanged from last month’s forecast. In 2019, growth is expected to be stable at 2.1%.

Greece Economy Data

20122013201420152016
Population (million)11.111.011.911.911.9
GDP per capita (EUR)17,24716,41716,28416,18216,211
GDP (EUR bn)191181178176176
Economic Growth (GDP, annual variation in %)-7.3-3.20.4-0.20.0
Domestic Demand (annual variation in %)-9.8-4.1-0.6-0.20.5
Consumption (annual variation in %)-8.0-2.60.4-0.21.4
Investment (annual variation in %)-23.5-8.4-4.6-0.20.1
Exports (G&S, annual variation in %)1.21.57.83.4-2.0
Imports (G&S, annual variation in %)-9.1-2.47.60.3-0.4
Industrial Production (annual variation in %)-2.0-3.2-1.91.02.5
Retail Sales (annual variation in %)-12.2-8.1-0.4-1.5-0.6
Unemployment Rate24.627.526.525.023.5
Fiscal Balance (% of GDP)-8.9-13.1-3.7-5.90.7
Public Debt (% of GDP)160177180177179
Inflation Rate (HICP, annual variation in %, eop)0.3-1.8-2.50.40.3
Inflation Rate (HICP, annual variation in %)1.0-0.9-1.4-1.10.0
Inflation (PPI, annual variation in %)4.8-0.9-1.2-  -  
Policy Interest Rate (%)0.750.250.05-  -  
Stock Market (annual variation in %)33.428.1-28.9-  -  
Exchange Rate (vs USD)1.321.381.21-  -  
Exchange Rate (vs USD, aop)1.291.331.33-  -  
Current Account (% of GDP)-3.8-2.0-1.60.1-0.6
Current Account Balance (EUR bn)-7.3-3.7-2.90.2-1.1
Trade Balance (EUR billion)-19.8-15.2-17.0-14.3-16.0

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Greece Facts

ValueChangeDate
Bond Yield4.940.76 %Feb 22
Exchange Rate1.230.65 %Feb 22
Stock Market845-1.46 %Feb 22

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