The global roll-out of Covid-19 vaccines by spring of 2021 offers hope of the return of tourism and a strong rebound for Greece, while the approval this week of the EU recovery package and the extension of the ECB’s PEPP programme further boost the country’s growth prospects.
A ten-year roadmap to economic recovery is contained in the Pissarides committee’s recommendations to Greek Prime Minister Kyriakos Mitsotakis. The actions recommended in the report set out to double annual growth from 1.7% to 3.5% by 2030, and raise per capita GDP to 81% of the EU average from 67% today. The report forecasts that unemployment would fall to 7% from the current 17%. Prime Minister Mitsotakis welcomed the report, saying that Greece wants to be competitive on the tax front, the quality of its human capital, and the operations of the state through transparency and the independence of institutions.
Greek GDP rose by 2.3% in Q3 on a quarterly basis, driven mainly by a 14% increase in consumption. The recovery lagged behind the rest of the eurozone, which recorded growth of 12.7%, while the latest data from the Hellenic Statistical Authority ELSTAT show an annual contraction of -11.7% for the Greek economy compared to Q3 2019.
Foreign analysts predict a strong post-Covid rebound for Greece, as the availability of vaccines is seen to boost the prospects for tourism in 2021. Rating agency Scope and research firm Capital Economics forecast next year’s economic growth at 4.5%, while Citigroup revised its forecast for 2020 to -7.7%, followed by growth of 2.2% in 2021, and 6.2% in 2022.
The European Central Bank (ECB) will be able to purchase an additional €10 billion worth of Greek government bonds up until March 2022 under the extension granted to the PEPP scheme, taking the total allowance up to €37 billion.
The Ministry of Infrastructure and Transport plans to launch projects totalling €13.6 billion over the next three years. The projects include road networks, railroads, and works against natural disasters. The prospect of renewed activity in the sector is attracting global players including names like Netherlands based Reggeborgh, as well as domestic construction firms such as Mytilineos and Avax.
The final stage in the tender process for the €870 million Ultrafast Broadband (UFBB) project is due to kick off in late January 2021. The project has already secured €223 billion of EU funding and will be the largest public-private partnership project to date in Greece. Nine parties have declared an interest in participating, including some of Greece’s largest telecoms and energy players.
The government launched its Digital Transformation Bible, an ambitious roadmap consisting of close to 450 projects backed by €6.4 billion of funding, to speed up the digitisation of the public and private sectors and boost Greece’s digital readiness. The priorities range from infrastructure investments to digital education programmes intended to ready Greece for the “4th industrial revolution”.
Marathon Venture Capital has launched Marathon Fund II, a €40-million fund investing in Greek start-ups, with the participation of the European Investment Fund and Hellenic Development Bank, alongside private and corporate investors.
Lamda Development, the company b