by Athanasios Adamopoulos

 

 

The Greek economy has shown a strong performance in 2022 and moves towards a positive 2023 amidst a global geopolitical and economic turmoil.

 

All the latest economic indicators confirmed that the Greek economy grew strongly last year while a series of positive developments in the fiscal and energy fronts are laying the foundations for a positive economic course also in 2023.

 

More specifically, the economic sentiment index grew to 104.3 points in December from 101.4 in November, to reach 9-month highs. The index could rise further in the coming months, as it usually happens during pre-election periods.

 

The KEPE GRIV "Fear" Index eased to 28.48% in December from 31.52% in the previous month, offering more evidence of a decrease in uncertainty on the Greek market. The index remained below its historical average level (since January 2004) for the Greek market, which stands at 32.58%.

 

Greek industrial production fell 0.9% in November 2022, although manufacturing production rose 2.6% in the month, The industrial production index grew by 2.6% on average in the January-November period compared with the same period in 2021, while the seasonally-adjusted index rose 1% in November from October 2022.

 

Greek unemployment rate eased to 11.4% of the workforce in November 2022, from 11.5% in October and 13.1% in November 2021. The number of unemployed people totaled 527,758, down 14% from November 2021 and down 1.1% from October 2022.

 

Greek enterprises were resilient in 2022 and look forward to positive growth rates in 2023 as well. An announcement by the Union of Hellenic Chambers of Commerce said that this optimism combined with the festive climate of the Christmas and New Year's eve was positively reflected on Greek enterprises, with high occupancy rates in the hospitality sector and increased turnover in retail stores. 

 

Meanwhile, wholesale electricity prices fell below 100 euros/MWh in Greece for the first time in 18 months. Electricity prices for Wednesday were set at 86.77 euros/MWh in the Greek Energy Exchange, falling below the 100-euro barrier for the first time since August 2021. Market analysts attributed this development to a series of factors such as the increase of renewable sources in the energy mix (together with hydroelectric their share surpassed 61% of the total), good weather conditions and a sharp decline in natural gas prices in global markets, currently at 55 euros/MWh. This price is one of the lowest in Europe.

 

Greek state budget recorded a primary deficit of 6.676 billion euros in 2022, down from a budget target for a shortfall of 8.506 billion euros and a primary deficit of 10.327 billion euros in 2021, the Finance ministry said. More specifically, according to provisional budget execution data, in an amended cash basis, the state budget recorded a deficit of 11.680 billion euros last year, down from a budget target for a deficit of 13.400 billion and a deficit of 14.872 billion euros in 2021. Net revenue totaled 59.598 billion euros, down 0.4% from budget estimates, while regular budget revenue was 65.751 billion euros, down 0,1% from targets. Tax revenue amounted to 55.316 billion euros, up 0.3% from targets, tax returns totaled 6.153 billion euros (up 159 million from targets), while Public Investment Program revenues totaled 3.573 billion euros, down 885 million from targets. Budget spending was 71.278 billion euros, down 2.7% from targets, while regular budget spending were down 1.384 billion from targets. Budget spending was up by 1.528 billion euros compared with 2021.

 

The successful auction of a new 10-year bond issue by the Public Debt Management Authority on Tuesday - the auction raised 3.5 billion euros covering half of the annual borrowing program - raised the government's cash buffer to 36.5 billion euros. This development sent a strong message to foreign investors and markets that Greece could easily cover its borrowing needs in 2023 although at a higher cost as the interest rate of the issue was set at 4.25%, more than double the interest rate of the previous auction in February 2022. Foreign investors were allocated 2.8 billion euros of the 10-year bond issues while domestic investors taking the remaining 700 million euros.