Greece: Macroeconomic Country Outlook
- GlobalData forecasts Greece’s real GDP to grow by 3.4% in 2022
- Greece was ranked 72nd out of 152 nations in the GlobalData Country Risk Index (GCRI) Q2 2022
- According to GlobalData, the financial intermediation, real estate and business activities sector of the country witnessed the highest growth rate of 7.7% in 2021
In October 2021, Greece and Egypt signed a memorandum of understanding (MoU) to develop a new subsea electricity line connecting their power systems. In December 2021, Greece and the US signed MoU to boost collaboration on maritime safety and operations. In February 2022, Greece and Bangladesh signed a MoU to recruit 4,000 Bangladeshi workers each year in Greece by providing them temporary work permits for five years. In April 2022, Greece and Cyprus signed a two-year MoU for the cooperation on health and medical sciences. In July 2022, Greece and Saudi Arabia signed a MoU for bilateral cooperation in the fields of renewable energy, electrical interconnection, exporting electricity to Greece.
Key findings
- Recovery and Resilience Facility of Greece: In 2021, the European Commission approved a grant of EUR17.8 billion ($21.1 billion) and a loan of EUR12.7 billion ($15 billion) under the Recovery and Resilience Facility (RRF). The plan is expected to boost the country’s gross domestic product by 2.1% to 3.3% by 2026. The plan would also introduce up to 62,000 additional jobs in the country by 2026. The RPF facility allocated EUR1.3 billion ($1.5 billion) in the energy-efficient renovation of more than 100,000 residences, including low-income households. Moreover, EUR600 million ($709.7 million) has been allocated for reforestation, biodiversity, flood mitigation and irrigation network upgrades, which seeks to support environmental protection. The country announced to install at least 36,000 interactive learning systems in classrooms of primary and secondary schools by December 31, 2025. The policy will get completed by August 2026.
- Greece’ stance on Russia’s invasion of Ukraine: The Greek government condemned Russia’s invasion of Ukraine. In March 2022, Greece sent two planeloads of Kalashnikov rifles and ammunition to assist Ukraine, as result of this Russian-Greek relations have taken a turn for the worse. On March 1, 2022, the Prime Minister of Greece called the conflict between Russia and Ukraine a clear violation and an attempt to abolish the freedom of another country. Moreover, the country supports European Union sanctions against Russia and stands ready to host Ukrainian refugees in Greece.
- Greece is ranked 34th out of 190 countries in World Bank’s doing business ranking in 2020: According to the World Bank, Ease of Doing Business Report (2020), Greece scored 68.4, lower than the OECD (high income average) score of 77.8. It takes four days to start a business in Greece as compared to the OECD average of 9.2 days. Greece was ranked 34th in trading across borders and 86th in dealing with construction permits.The unstable economic environment and low intensity of business activity in the country have taken a toll on economic growth.
- Healthcare project in Greece: In August 2022, the Stavros Niarchos Foundation (SNF) Health Initiative announced to invest $750 million for the design and construction of three hospitals in the cities of Komotini, Thessaloniki, and Sparta. The project aims to boost healthcare facility in the country. Greece will also introduce a mental health clinic for children. The hospital on the outskirts of Thessaloniki will be a dedicated pediatric hospital. The facility in Komotini will provide all the services of a general hospital and hospital of Sparta will provide acute secondary care for adults and children. The project is expected to be operational by 2025.
- Step toward development of renewable energy in the country: In June 2022, Greece approved a new law, which aims to reduce average licensing time for renewables to 14 months as compared to 5 years, development of at least 3.5GW of energy storage by 2030 and increase the power grid’s ability to accommodate renewables and net metering. The regulation also seeks to raise renewables penetration to 35% of the energy mix and 70% of the power mix in order to contribute to the country’s 2030 goals. According to the authorities, renewable installations are expected to reach 2GW in 2022. Moreover, Greece aims to attract EUR10 billion ($11.8 billion) in investment by 2030 in order to achieve 2030 renewable goal. In July 2022, the European Bank for Reconstruction and Development (EBRD) invested EUR20 million ($23.7 million) into a 7-year EUR230 million ($272.1 million) green bond to enhance sustainability of the country.
- Integration of digital technology: According to the EU, Digital Economy and Society Index (2022), the country allocated (i) EUR598 million ($707.4 million) to digitalize archives and related services (ii) EUR131 million ($155 million) for the development of fiber optic infrastructure in buildings (iii) EUR375 million ($443.6 million) for digital transformation of SMEs (iv) EUR160 million ($189.3 million) for the development of 5G corridors on all major highways I Greece (v) EUR200 million ($236.6 million) for the development of a constellation of small satellites (vi) EUR32 million ($37.9 million) to improve cybersecurity in the public sector and provide advanced security services for national critical infrastructures. In November 2021, the Ministry of Digital Governance launched a public consultation on the new National Broadband Plan to achieve the Gigabit objectives for 2025 and the 2030 Digital Decade targets.
Key fundamentals
Sectoral outlook
- Revival for travel and tourism industry: In April 2022, Greece and the US signed a MoU to expand their ties in tourism. The agreement aims to boost trade in travel services between the two countries through exchange of practices in travel & tourism. It also aims to digitalize tourism services, exchange information on investment opportunities, tourism statistics, data research, tourism policy and developments in the global tourism market, including new tourism products and services. In August 2022, the Minister of Tourism confirmed the income from travel and tourist flow remains satisfactory amid many global crises. According to the Bank of Greece, the total number of international arrivals in the country grew by 547.9% in five months of 2022. According to the World Economic Forum, Travel and Tourism Development Index (2021), the country ranked 28th out of 117 nations. According to the World Travel and Tourism Council, travel and tourism contributed 14.9% to GDP and the sector created 781.6 thousand jobs, which is equivalent to 19.9% of total jobs in 2021. According to GlobalData, international arrivals to the country increased from 7.4 million in 2020 to 13.9 million in 2021 and is forecast to rise to 23.9 million in 2022 and 27.7 million in 2023.
- Steps to enhance renewable energy: On April 6, 2022, the Prime Minister of Greece inaugurated a 204-megawatt solar park in the country. On July 27, 2022, Greece and Saudi Arabia signed a new energy agreement. Both the nations announced a bilateral cooperation on a variety of energy fields, including carbon capture, clean hydrogen, petrochemicals and Saudi electricity exports to Greece. According to the Greece’s Ministry of Environment and Energy, the country will hold two joint solar and wind power tenders for 600MW of capacity each, as well as two 100MW tenders for small PV (photovoltaic system) and wind power systems in 2023. Additionally, the government will hold tenders for at least 500MW of PV and wind capacity in 2024. In July 2022, a Germany-based energy company REW and a Greece-based oil firm Hellenic Petroleum holdings announced a plan to develop offshore projects in Greece. The offshore wind with the capacity of 2GW would get operational by 2030.
- Robust policy to boost technology of the country: In February 2022, the European Investment Bank anticipated to provide EUR125 million ($147.9 million) to strengthen digitalization projects undertaken by Greece’s Digital Governance Ministry. The project includes Wi-Fi GR, which seeks to create 3,000 hot spots in public areas across the country and digitalize public health services as well as the creation of teleconferencing networks in courts and prisons in Greece. In July 2022, the country allocated EUR180 million ($212.9 million) for a project on the digital transformation of enterprises, which is expected to be operational by Q2 2025. Moreover, the project would favor investments that aim at strengthening electronic payments, online sales and electronic pricing applications, such as the adoption of digital advertising instruments and teleworking systems. Under the recovery and resilience policy (2021–26), Greece will invest EUR160 million ($189.3 million) for the development of 5G networks, EUR1.3 billion ($1.5 billion) for the digital transformation of the public sector and EUR375 million ($443.6 million) for the digitalization of businesses through the integration of digital technologies in SMEs. Additionally, the country allocated more than EUR500 million ($591.5 million) to promote the digital transformation of the education and health system and EUR750 million ($887.2 million) for digital upskilling in the country.
GlobalData Country Risk Index (GCRI) – Q2 2022
Greece was ranked 72nd out of 152 nations in the GCRI Q2 2022. The country’s risk score is in the manageable-risk nations band (40–50). Greece’s risk score across the major PESTLE parameters as well as the overall risk score (42.7), were lower than the world average (44.0), but higher than the West-Europe region’s (26.1). The country secured low risk on political environment (40.3), demography and social structure (37.3), technology and infrastructure (40.7), compared to the World. However, the scores are higher than the West-Europe average for the same indicators in Q2 2022.
GCRI Methodology
GlobalData’s unique Country Risk Model determines the existing and future level of country risk by assessing various qualitative and quantitative factors. The index is designed to help firms formulate their global business strategies based on historical developments in an economy.
The Country Risk Index incorporates the latest available macroeconomics, political, social, technological, environmental, and legal data from a range of recognized national and international statistical sources and incorporates proprietary data from GlobalData. West European nations in this publication include Greece, Sweden, Finland, Germany, Denmark, Iceland, the Netherlands, Austria, Norway, Ireland, the UK, Greece, Luxembourg, France, Italy, Spain, Greece, and Portugal.
About the report
GlobalData Macroeconomic Outlook report is designed to provide detailed macro-economic analysis which will help clients in their business planning, investment and strategic decisions, and analysis. It also provides a quick view of the current situation and the risk score of the country in comparison to region and world based on the proprietary risk framework. The report also highlights key strengths, weaknesses, opportunities, and threats in each of the pillars of PESTLE, economic growth prospects, and key events which can impact the country’s future outlook.
More details: Macroeconomic Outlook Report: Greece
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