The Greek Wire is a monthly newsletter aiming to inform you about key economic and political developments in Greece.
edited by Konstantinos Maravelidis
S&P Global upgrades Greece to investment grade
After DBRS, S&P Global also upgrades Greece to investment grade. Fitch is up next on 1 December. A Bank of Greece study finds that half the benefits of returning to investment grade accrue after the actual event. Upgrade to investment grade also reflects a solid fiscal outlook. Our target for this year’s primary surplus was increased from 0.7% to 1.1%, and Greece’s overall budget deficit in both 2023 and 2024 is projected to be amongst the lowest of any country in the developed world, including Germany.
Greek government rethinks tax breaks
The Greek government will review, maybe redesign the current tax exemptions. Also under review are the many expenses that reduce the taxes of a number of professional groups, or completely exempt them from tax obligations. The goal is the electronic recording of all tax exemptions, so that their cost to the budget can be checked and also exactly how many taxpayers they concern. Income tax data shows that personal income tax receipts last year amounted to €10.3 billion, while the exemptions from this category exceeded €5 billion.
Inflation on check: Annual increase 2.4% September 2023
The evolution of the Harmonized Index of Consumer Prices (HICP) of September 2023 compared with September 2022 increased by 2.4%. In September 2022, the annual rate of change of the HICP was 12.1%. The HICP in September 2023 compared with August 2023 increased by 1.9%. In September 2022, the monthly rate of change of the HICP was 3.0%. The average HICP for the twelve - month period from October 2022 to September 2023, compared with the corresponding index for the period October 2021 to September 2022, increased by 5.4%. The annual rate of change of the average HICP between the twelve - month period October 2021 to September 2022 in comparison to the period October 2020 to September 2021 was 8.1%.
Source: Hellenic Statistical Authority (ELSTAT)
Unemployment rate drops to 10.9%
The seasonally adjusted unemployment rate in August 2023 amounted to 10.9% compared to the downwards revised 12.3% in August 2022 and to the upwards revised 10.9% in July 2023. The number of employed persons amounted to 4,170,977 persons, increased by 30,190 persons as compared with August 2022 (0.7%) and decreased by 47,172 persons compared with July 2023 (-1.1%). The number of unemployed persons amounted to 512,193, decreased by 71,013 persons as compared with August 2022 (-12.2%) and by 2,080 persons compared with July 2023 (-0.4%). The number of persons outside the labour force, i.e., persons under the age of 75, that neither work nor look for a job, amounted to 3,113,742, increased by 11,597 persons as compared with August 2022 (0.4%) and by 46,940 persons compared with July 2023 (1.5%).
Source: Hellenic Statistical Authority (ELSTAT)
Bank credit and deposits – September 2023
According to Bank of Greece data, the annual growth rate of total credit extended to the domestic economy stood at 2.3% in September 2023, compared with 1.2% in the previous month. The annual growth rate of total deposits stood at 2.5% in September 2023, compared with 3% in the previous month. Deposits placed by the private sector increased by €2,231 million in September 2023, compared with an increase of €190 million in the previous month. the monthly net flow of credit to corporations was positive by €2,054 million, compared with a negative net flow of €322 million in the previous month; the annual growth rate increased to 4.9% from 3.0% in the previous month. In particular, the annual growth rate of credit to non-financial corporations (NFCs) increased to 4.7% from 2.4% in the previous month; the monthly net flow was positive by €2,213 million, compared with a negative net flow of €297 million in the previous month. The annual growth rate of credit to insurance corporations and other financial intermediaries decreased to 6.6% from 8.5% in the previous month; the monthly net flow was negative by €160 million, compared with a negative net flow of €26 million in the previous month.
Decrease of 6.2% in Industry turnover
According with new data from the Hellenic Statistical Authority, the Overall Turnover Index in Industry (both Domestic and Non-Domestic Market) in August 2023 recorded a decrease of 6.2% compared with the corresponding index of August 2022. The Overall Turnover Index in Industry in August 2022 increased by 42.5% compared with the corresponding index in August 2021. The Overall Turnover Index in Industry in August 2023, compared with July 2023, recorded a decrease of 11.1%. The average Overall Turnover Index in Industry for the 12-month period from September 2022 to August 2023 increased by 3.5%, compared with the corresponding index of the 12-month period from September 2021 to August 2022. The average Overall Turnover Index in Industry for the 12-month period from September 2021 to August 2022 increased by 38.9% compared with the corresponding index of the 12-month period from September 2020 to August 2021.
Source: Hellenic Statistical Authority (ELSTAT)
TURNOVER INDEX IN RETAIL TRADE: July 2023, y-o-y increase 3.1%
The Overall Turnover Index in Retail Trade in July 2023 increased by 3.1%, compared with the corresponding index of July 2022, while the corresponding index of June 2023 increased by 5.2%. The Overall Volume Index in Retail Trade (i.e., turnover in retail trade at constant prices) in July 2023, decreased by 3.4%, compared with the corresponding index of July 2022, while, compared with the corresponding index of June 2023, increased by 9.7%. The seasonally adjusted Overall Turnover Index in July 2023, compared with the corresponding index of June 2023, increased by 3.1%. The seasonally adjusted Overall Volume Index in July 2023, compared with the corresponding index of June 2023, increased by 3.5%.
Source: Hellenic Statistical Authority (ELSTAT)
Olive oil prices dominate the Agriculture Output Index
The Output Price Index in Agriculture – Livestock (excluding subsidies) increased by 25.8% in August 2023, compared with August 2022. The corresponding index in August 2022 had recorded an increase of 8.1%, compared with August 2021. The increase of 25.8% in the Output Price Index in August 2023 compared with August 2022 , is on account of: a) increase 28.1% of the price index in crop output group and mainly on the rate of change of the groups olive oil, and vegetables and horticultural products, and b) increase 11.3% of the price index in animal output group. The Output Price Index in August 2023 increased by 2.6%, in comparison with July 2023. The twelve-month weighted average output index from September 2022 to August 2023 increased by 19.1%, compared with the corresponding index of the period from September 2021 to August 2022.
Source: Hellenic Statistical Authority (ELSTAT)
Building Activity: +20.6% increase in volume
The Hellenic Statistical Authority announced data of the Building Activity Survey for the month July 2023. The Total Building Activity (private-public) in Greece, which is calculated on the basis of the number of issued building permits, amounted to 2,423. This figure corresponds to 612,421 m2 of surface and 3,112,259 m3 of volume, reflecting, respectively, a 7.5% increase in the number of building permits, a 17.5% increase in surface and a 20.6% increase in volume, compared with the corresponding month of 2022. The building permits for the Private Building Activity issued in Greece in July 2023 amounted to 2,402. This figure corresponds to 584,886 m2 of surface and 2,965,898 m3 of volume. In comparison with the same month of 2022 there is an 8.0% increase in the number of building permits, a 16.0% increase in surface and an 18.5% increase in volume.
Source: Hellenic Statistical Authority (ELSTAT)
Closing the Affordable Housing Gap
The Price Index of Work Categories in Construction of New Residential Buildings in the 3rd quarter 2023 compared with the 3rd quarter 2022 recorded an increase of 3.2%. The previous year the corresponding index had recorded an increase of 7.6%. The Price Index of Work Categories in the 3rd quarter 2023 compared with the 2nd quarter 2023 recorded an increase of 0.7%. The previous year the corresponding index had recorded an increase of 1.9%. The twelve-month average index, from October 2022 to September 2023, compared with the corresponding index from October 2021 to September 2022, recorded an increase of 5.1%. The corresponding previous twelve-month periods, the average index had recorded an increase of 5.9%.
Source: Hellenic Statistical Authority (ELSTAT)
The Greek Merchant Fleet decreased by 0.4%
China became the world’s largest merchant fleet in gross tonnage terms, edging past Greece, according to data from Clarksons Research. Greece still retains an edge however when the rankings are measured by deadweight (dwt). Japan still in third place on Clarksons’ shipowning podium. Data announced by Hellenic Statistical Authority, shows the Greek Merchant Fleet decreasing by 0.4% in August 2023 compared to August 2022. An increase of 0.2% was recorded in August 2022 compared with August 2021. The gross tonnage of the Greek Merchant Fleet, for vessels of 100 GRT and over, recorded a decrease of 3.6% in
August 2023 compared with August 2022. A decrease of 1.4% was recorded in August 2022 compared with August 2021.
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