Following the promising data in from 2019 in terms of growth in the economy across most industry sectors not to mention record foreign investment, Greece can expect a slump in growth when the next reports are out. In latest annual report, the Bank of Greece has forecast that Greece’s economy is now expected to record zero growth in 2020, down from a previously forecasted growth rate of 2.4%.
The latest figures from the Enterprise Greece report are not likely to be replicated in the following months:
The European Central Bank has included Greek government bonds in its new quantitative easing program, reflecting Greece’s improved fiscal position and credit standing. According to officials, a total of €12 billion worth of Greek government debt will be purchased under the ECB’s €750 billion Pandemic Emergency Purchase Programme, helping to boost liquidity and reducing borrowing costs for Greek banks.
Greece’s economy grew at a 1.9% rate in 2019, confirming the country’s steady recovery despite a slowdown in the fourth quarter of last year due to uncertainty in global markets. According to preliminary data from the Hellenic Statistical Authority, GDP rose 1% in the October to December quarter, down from a 2.3% rate in the third quarter.
Prices for Greek residential properties rose 7.2% in 2019 – compared with a 1.8% increase in 2018 - confirming that the price recovery in Greek real estate is accelerating. According to data by the Bank of Greece, prices for residential property rose 7.5% in the fourth quarter last year.
Real Estate FDI
Individual foreign investment in Greek real estate has increased sharply, more than tripling in the past three years. According to the latest annual report by the Greek Central Bank, net Foreign Direct Investment in Greek property rose to €1.45 billion in 2019, up from €1.13 billion 2018 and €414.7 million in 2017.
Greek travel and tourism receipts jumped 12.8% last year to a record €18.15 billion, according to the latest Bank of Greece data. The figures also show a 4.1% increase in tourist arrivals last year, driven mainly by rising numbers of visitors from fellow European Union member countries.
Greece’s leading wind power producer, Terna Energy, announced that it will invest €550 million in new renewable energy projects around the country, including in a 180 MW wind farm on the island of Evia. The company currently has more than 600 MW of installed wind power capacity in Greece and is planning on constructing a further 400 MW worth of capacity.
Greek banks have reduced their stock of bad loans by €13.8 billion in the last year to €68 billion as of the end of 2019, according to the Bank of Greece’s annual report. By the end 2021, the banks want to lower the ratio of bad loans.