Our comprehensive assessment of Greece's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Greece, as well as the latest industry developments that could impact Greece's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Greece before your competitors.
Greece Country Risk
Greece's economy will register modest growth in 2016, following a large recession in 2015.
Despite this, government spending cuts and dire domestic conditions will ensure households remain under extreme pressure.
Greece's political agenda will be dominated by the government's progress implementing bailout reforms, recapitalising of the banking sector, and coping with the huge numbers of migrants entering the country.
Greece's current account will remain firmly in surplus in 2016 and 2017, reducing the potential for funding strains to emerge in the financial account.
Major Forecast Changes
We have upgraded our estimate for the current account to come in at 1.5% of GDP in...
Greece Industry Coverage (16)
BMI View: Cheese production will see buoyant growth in the coming years due to strong export opportunities, while sugar will remain on a declining trend as the competition is set to increase in the EU market. Poultry consumption will outperform the livestock sector due to its lower cost, which will provide a modest push to corn production.
Poultry consumption from 2015 to 2019: up 17.2% to 201,500 tonnes. The cheaper price of poultry meat will see it continue to gain ground against beef and pork.
Cheese production to 2019: up 15.0% to 246,300 tonnes. Solid exports opportunities will lead the way in keeping the dairy segment supported.
2016 real GDP growth: 1.4% (up from 0.4% in 2015,...
BMI believes that the significant increase in passenger car sales is mainly due to the sharp rise for rental cars in the tourist season.
In 2014, passenger car sales increased 21.3% to 71,218 units. BMI attributes this growth over the year to low base effects and pent-up demand in the market following years of sustained declines. The recovery of the country's autos market has continued despite sustained weakness in the country's economy.
In 2014, CV sales increased 40.5%. BMI believes that this respite comes on the back of low base effects from a weak 2013 and pent-up demand from several years of sustained declines. We expect these dynamics to buoy the segment somewhat despite our bearish view on the broader macro picture, and this has informed our expectation for sustained growth in total CV sales in 2015. The Greek economy remains depressed, with national...
Defence & Security
Greece Defence & Security
BMI View: The report discusses Greece's strategic situation, including its fractious relationship with Turkey, its relations with NATO and other European nations, and its global relations and participation in military operations around the world. In terms of procurement, the report examines Greece's current defence programmes, planned acquisitions and future procurement aspirations in light of the country's economic crisis.
BMI expects Greece to spend USD6bn on defence in 2014. On average, between 2011 and 2013, Greece spent USD6.2bn annually on defence. Spending has progressively declined as the Greek economy has contracted and the government has sought to bring public spending under control. We expect Greece to spend less on defence between 2015 and 2019, spending an average of USD5.5bn. By 2019 we expect Greece to be spending USD5.6bn on...
Food & Drink
Greece Food & Drink
BMI View: Greece's economic growth prospects will remain extremely weak in the years ahead. Consumer spending will not recover from a huge destruction of household wealth since the economic crisis, while fiscal austerity conditions attached to the country's third bailout will prevent any economic recovery reaching escape velocity.
Headline Industry Data (local currency)
2015 per capita food consumption = 0.1%; forecast compound annual growth rate (CAGR) 2014-2019 = +0.8%.
2015 alcoholic drink value sales = -1.3%; forecast CAGR 2014-2019 = +0.1%.
2015 soft drink value sales = -0.3%; forecast CAGR 2014-2019 = +0.9%.
2015 mass grocery retail sales = +0.4%; forecast CAGR 2014-2019 = +0.8%.
Greece Freight Transport
Freight Demand Picking Up Pace In 2015
Looking at specific Greek transport modes, the main feature of 2015 will be faster growth compared to 2014. All modes will experience cargo volume expansion in a range of roughly 2.0% to 6.0%, ahead of the general rate of expansion experienced in the slowly recovering Greek economy. As in recent years, the best performer will be the Port of Piraeus, lifted by new investment and its role as a European gateway. Foreign trade growth will accelerate to 3.5%, giving a positive boost to freight demand after years of contraction.
The Greek economy is recovering, but the transition seems to be from deep recession to weak growth with continuing downside risks. We now expect GDP to gain 1.2% in 2015, up from an estimate of 0.2% positive growth in 2014, which itself came after six consecutive years of contraction (2008-2013). The problem is that the growth drivers are...
BMI View: Overall the long term outlook for Greece's struggling construction sector remains bleak. While the country has successfully agreed a third bailout deal, economic growth will remain subdued and significant structural weaknesses persist, exacerbated by ongoing political uncertainty. There is therefore little scope for public spending and we expect private investment to be the sole source of growth throughout much of the forecast period. Key to this is the progression of highly unpopular privatisations of major state owned assets, including transport infrastructure and key utilities. Although we expect some growth in the construction sector value over the forecast period, driven by projects such as the Trans Adriatic Pipeline, it will be more than a decade before the industry successfully...
BMI View: As with the remainder of the Greek economy, the country's insurance sector has suffered extensive losses in recent years and, despite some growth expected over the forecast period, will remain under-developed by most metrics. The lingering debt crisis in Greek which has severely undermined confidence in formal banking institutions, combined with the general lack of awareness and uptake of many insurance products will continue to hamper the development of both life and non-life insurance moving forward.
In US dollar terms, we expect to see sharp decreases in insurance premiums written in the Greek market over 2015 and potentially into 2016, due in large part to the strength of the US dollar against an increasingly weak Euro, as well as due to the poor prospects for growth in the market. In local currency terms, Greece's life insurance segment is...
Greece Medical Devices
BMI View: Following a contraction in 2015, the market will return to growth from 2016 but will struggle to attain its former level before 2019. The market will remain heavily reliant on imports, as domestic manufacturers are mainly small scale operations focusing on low value, high volume disposables. The economic crisis, ongoing austerity measures and a weak euro have contributed to a downward trend in imports since 2009 and there is little sign of improvement in the near future.
|Total (USDmn)||Per Capita (USD)||...|
Oil & Gas
Greece Oil & Gas
BMI View: The limited interest in July's 2nd International Licensing Round confirmed our scepticism about the prospects of the Greek upstream sector. We maintain our 10-year crude oil production forecasts, which include a tentative 4,000b/d of new production from Energean's Prinos programme by 2019. On the downstream market, lower prices and a colder winter meant higher heating gasoil consumption, offsetting ...
Pharmaceuticals & Healthcare
Greece Pharmaceuticals & Healthcare
BMI View: Despite the parlous state of the Greek economy and the imposition of emergency capital controls, drugmakers will maintain their commitment to the country's pharmaceutical market and ensure continuity of supply. Authorities will further restrict parallel exports to prevent medicine shortages. However, given that we expect Greece to return to a recession in 2015 and government revenues to fall, liquidity issues within the pharmaceutical supply chain will persist and debts within the Greek healthcare system will continue to accumulate.
Headline Expenditure Projections
Pharmaceuticals: EUR4.96bn (USD6.64bn) in 2014 to EUR4.85bn (USD5.34bn) in 2015 -2.1% in local currency terms and -19.6% in US dollar terms. Forecast unchanged from...
Greece Real Estate
BMI View: The Greek economy has suffered greatly from the sovereign debt crisis in 2015. Investor confidence has been damaged, while the high risks of investing have seen demand dwindle and rental rates fall. Although rates could rise in the long term, the industry, and the Greek economy in general, continues to be plagued by uncertainty.
The left-wing Syriza-led government was initially opposed to austerity measures, but eventually agreed to EU bailout conditions that imposed harsh economic reforms on the country. These seek to streamline the pension system and boost tax revenues, particularly from VAT. The agreement led to the resignation of the prime minister, Alex Tsipras, and a general election that resulted in a second Syriza-led coalition. The volatile political and fiscal situation has resulted in negative business sentiment across the commercial real estate sector. Falling rental rates...
After a decade of impressive growth, the Greek non-hydro renewables industry came to a standstill in 2014, largely on account of regulatory changes introduced under the New Deal in mid-2014 as well as persisting economic and political challenges. While several recent project announcements highlight potential of the industry, we believe Greece's non-hydro renewables expansion will remain anaemic over the coming decade.
Measures to address power regulator LAGIE's deficit (which funds renewable energy) include the New Deal, introduced in April 2014. The measures substantially reduced feed-in tariffs, most steeply for solar photovoltaic (PV) plants; increased the renewables levy charged to all consumers (residential, commercial and industrial); and capped annual installations of new renewables capacity. This is the largest shake-up and restructuring of the Greek renewables sector to date.
In light of these...
BMI View: Within a turbulent economic and political climate, Greek ports and shipping continue to show resilience as they focus on their roles as regional gateways and transhipment hubs rather than relying on domestic demand. We forecast positive growth at the ports of Piraeus and Thessaloniki in 2015 and the medium term. The new government is attempting to have investment committed to the ports as part of privatisation agreements and is also targeting Greek ship owners with new taxation scheme propositions. Adding to these considerations, early elections to be held in September create a greatly volatile market.
The port of Piraeus remains the leading Mediterranean container hub and diversification strategies implemented by COSCO, which operates two of its...
BMI View : We have revised our outlook for the Greek telecommunications market in our Q1 2016 report, as the Greek mobile market added a healthy 375,000 new subscribers in H1 2015, higher than it has before since 2011. Nevertheless, we are cautiously optimistic about the Greek market in general, recording year-over-year growth of 2.5% in June 2015. The market is highly saturated and other concerning trends point towards a shift in low-cost prepaid services, meaning consumers are spending less. The three major carriers have all launched 4G services as of Q1 2015, but the outlook is less than optimal.
|The Return of Hellas?|
BMI View: For many tourists, especially Europeans, Greece has become a popular destination for a holiday. The warm climate and stunning beaches have always drawn good numbers of visitors. In recent years, due to economic instability and political uncertainty, there has been some fluctuation in the numbers of inbound arrivals. However, over the short- and mid-term we forecast steady growth, as tourists look to make the most of Greece's current economic slump and the favourable exchange rates this has lead to.
The traditionally high number of arrivals means Greece has a fairly well developed accommodation sector, with a mix of major international hotel groups and smaller, independent establishments. In the short term this could limit the opportunities for investment in accommodation however over the longer term, as Greece recovers economically,...