19 Aug 2022
The Greek Wire - August 2022
“Fostering deeper regional cooperation in times of global crises”: Official Inauguration of Greek House Davos 2023
On Wednesday, 14 September, 2022, the Official Inauguration of Greek House Davos 2023 (GHD 2023) will take place at the Stavros Niarchos Foundation Cultural Center (SNFCC) in Athens, Greece, with the participation of regional political and business leaders and high-level officials from international organizations and the civil society from the Balkans and beyond.
Among other distinguished international speakers, the Vice-President of the European Commission responsible for Promoting our European Way of Life, Mr. Margaritis Schinas, and the Special Envoy of the President of Ukraine, Mr. Rustem Umerov, will hold a conversation on regional developments, moderated by the Editor of Forbes Magazine, Mr. Rhett Power. Mr. Umerov, a seasoned negotiator, played an instrumental role in the recent agreement between Ukraine and Russia, under the UN auspices, to restart grain exports, contributing significantly to the promotion of peace and stability in our broader region.
Following the successful organization of GHD 2022 last May, the Greek House is setting the agenda of the international discourse ahead of the World Economic Forum Annual Meeting in January 2023 in Davos, Switzerland. In these turbulent times of multiple global crises and in the environment of geopolitical tensions, health, energy and food emergencies, it is more evident than ever that multilateral cooperation and regional and global synergies are the key to peace and security, but also sustainable development and economic growth.
More details regarding the event and the speakers will follow in the coming weeks.
Exits bailout monitoring - Greece is out of the woods and a step closer to investment grade
Greece is about to exit post-bailout monitoring, and both government and creditors view the change as the end of a dark era that inflicted deep scars. As of August 20, Athens officially leaves behind the enhanced surveillance regime that followed its three back-to-back bailouts from 2010 to 2018. According to stock market analysts, the move sends a clear message to investors and markets that Greece is out of the woods and a step closer to investment grade. Greece's Finance Minister Christos Staikouras said that “after 12 years, a difficult chapter for our country comes to a close”.
Greece about to break the Tourist Arrival Record
As the world leaves behind the restrictions put in place during the COVID-19 pandemic, Greece is making a strong comeback as tourist arrivals continue. Tourism Minister Vassilis Kikilias confirmed that the country is expected to break pre-pandemic 2019 levels this year. In recent interviews, Kikilias said Greece was expecting more than 1 million international visitors per week during “an unprecedented August” with tourism-related revenue following suit. Indicative of the dynamic, all popular tourist destinations in Greece are full, said Kikilias, with occupancy levels exceeding 90 percent on Crete, Mykonos, Santorini, Rhodes and Kos. The number of UK travelers to Rhodes increased by 21% and to Crete by 43.2%, while the number of Germans to Rhodes was up 24.6% and to Chania by 78.3% over 2019 levels for the same month.
Tax revenues better than expected by 5.1 billion euros
Booming tourism brings good news on the tax-revenues front for the Greek Finance Ministry. In the first seven months of the year, revenues were €5.1 billion more than initially estimated. Overall, ministry officials estimate the net “fiscal space” created so far at €800 million, referring to the sum that can be used on extra spending, mostly on subsidies and other handouts. Officials estimate that this spending leeway could reach €2 billion by the end of the year, partly because, in the Stability Program agreed with Greece’s creditors, the country’s gross domestic product (GDP) for 2022 had been estimated at €197 billion, while the latest ministry estimates put GDP at €204 billion. This would mean an extra €2 billion in tax receipts. According to Alternate Finance Minister Theodoros Skylakakis, the higher revenue was proof of “the Greek economy’s resilience in the face of the enormous outside pressures it has faced in recent years.” The primary budget deficit, which excludes debt servicing, in January-July 2022 was €1.167 billion instead of the expected €5.8 billion.
Industrial Production Index: June 2022, y-o-y increase of 8.4%
The Hellenic Statistical Authority announced that the Industrial Production Index (IPI) in June 2022 recorded an increase of 8.4% compared with June 2021. The Overall IPI in June 2021 increased by 9.1% compared with the corresponding index in June 2020, with an increase of 3.3% for the period from January to June 2022 compared with the average IPI of the period from January to June 2021. The seasonally adjusted Overall Index in June 2022 recorded an increase of 3.2% compared with the corresponding index of May 2022.
Unemployment dropped to 12.1% in June
The Hellenic Statistical Authority announced the seasonally adjusted estimates of employment and unemployment for June 2022. In June 2022, it amounted to 12.1% compared to 15.0% in June 2021 and to 12.5% in May 2022. The number of employed persons amounted to 4,148,431 persons, increasing by 155,318 persons as compared with June 2021 (+3.9%) and by 12,020 persons compared with May 2022 (+0.3%). The number of unemployed persons amounted to 572,109, decreasing by 130,976 persons as compared with June 2021 (-18.6%) and by 17,233 persons compared with May 2022 (-2.9%). The number of persons outside the labor force, i.e. persons under the age of 75, that neither work nor look for a job, amounted to 3,110,882, decreasing by 55,254 persons as compared with June 2021 (-1.7%) and increasing by 2,560 persons compared with May 2022 (+0,1%).
Annual inflation at 11.6% in July 2022
The Consumer Price Index (CPI) in July 2022, compared with July 2021, increased by 11.6%. In July 2021, the annual rate of change of the CPI was 1.4%. Compared with June 2022, it decreased by 1.8%. In July 2021, the monthly rate of change of the CPI was -1.4%. The average CPI for the twelve-month period from August 2021 to July 2022, compared with the corresponding index for the period August 2020 to July 2021, increased by 7.1%. The annual rate of change of the average CPI between the twelve-month period August 2020 to July 2021, in comparison to the period August 2019 to July 2020, was -1.1%.
Trade balance deficit at 17,6 Bil euros for the first 6 months of 2022
The trade balance deficit in June 2022 amounted to 2,836.2 million euros (2,953.2 million dollars) in comparison with 1,987.9 million euros (2,363.0 million dollars) in June 2021, recording an increase, in euros, of 42.7%.The corresponding value of deficit, excluding oil products, in June 2022, recorded an increase of 473.2 million euros or 27.8%, while the corresponding value, excluding oil products and ships, in June 2022, recorded an increase of 475.6 million euros or 28.0%, in comparison with June 2021. The deficit of the trade balance, for the 6-month period from January to June 2022, amounted to 17,593.2 million euros (19,032.5 million dollars) in comparison with 10,249.9 million euros (12,169.7 million dollars) for the corresponding period of the year 2021, recording an increase, in euros, of 71.6%. The corresponding deficit, excluding oil products, recorded an increase of 4,336.1 million euros or 50.3%, and the corresponding deficit, excluding oil products and ships, recorded an increase of 4,301.4 million euros or 50.1%.
5,1% increase in overall turnover of Retail Trade
The Overall Turnover Index in Retail Trade in May 2022 increased by 5.1%, compared with the corresponding index of May 2021, while the corresponding index of April 2022 decreased by 10.3%. The Overall Volume Index in Retail Trade (i.e. turnover in retail trade at constant prices) in May 2022, decreased by 4.2%, compared with the corresponding index of May 2021, while, compared with the corresponding index of April 2022, decreased by 11.0%. The seasonally adjusted Overall Turnover Index in May 2022, compared with the corresponding index of April 2022, decreased by 3.7%. The seasonally adjusted Overall Volume Index in May 2022, compared with the corresponding index of April 2022, decreased by 4.9%.
Interest rates on the rise
The weighted average interest rate on new deposits remained almost unchanged at 0.03% in June 2022, while the weighted average interest rate on new loans increased to 3.98%. The interest rate spread between new deposits and loans increased to 3.95 percentage points. The weighted average interest rate on outstanding amounts of deposits remained unchanged at 0.03%, while the weighted average interest rate on outstanding amounts of loans remained almost unchanged at 3.48%. The average interest rate on consumer loans with a defined maturity at a floating rate increased by 36 basis points to 11.36%. The average interest rate on housing loans at a floating rate increased by 32 basis points to 2.95%.
The average interest rate on new corporate loans without a defined maturity remained almost unchanged at 3.80%. The corresponding rate on loans to sole proprietors decreased by 6 basis points to 6.29%. In June 2022, the average interest rate on corporate loans with a defined maturity at a floating rate increased by 12 basis points to 3.01%. The average interest rate on loans with a defined maturity at a floating rate to small and medium-sized enterprises (SMEs) decreased, compared with the previous month, by 32 basis points to 3.25%.
Bank credit and deposits
The annual growth rate of total credit extended to the domestic economy stood at 7.7% in June 2022, compared with 7.4% in the previous month. The annual growth rate of total deposits stood at 6.0% in June 2022, compared with 6.1% in the previous month. Deposits placed by the private sector increased by €2,720 million in June 2022, compared with an increase of €1,311 million in the previous month. In June 2022, deposits placed by the private sector increased by €2,72 million, compared with an increase of €1,311 million in the previous month; the annual growth rate increased to 6.9% from 6.3% in the previous month. In June 2022, corporate deposits increased by €2 million, compared with an increase of €1,647 million in the previous month; the annual growth rate increased to 16.2% from 14.3% in the previous month. In particular, deposits from NFCs increased by €2,442 million, against an increase of €1,488 million in the previous month. Deposits placed by insurance corporations and other financial intermediaries decreased by €443 million, compared with an increase of €159 million in the previous month.