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
A return to marginal positive real GDP growth rates in 2016 will be followed by years of sluggish growth.
A slight improvement in 2016 will mainly be driven by the removal of capital controls and a slight uptick in consumer confidence.
These growth rates will be insufficient to help Greek households and firms recover from the huge destruction of wealth the country has endured during its depression.
One of the few bright spots for Greece is it current account, which is likely to remain in surplus over the coming years, having been at a deficit of over 10% of GDP only a few years ago.
Consumer price index (CPI) growth will remain in positive territory, due to a slight recovery in domestic demand, the ongoing impact of VAT hikes, and supply-side issues for the...
Greece Industry Coverage (15)
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 View: A weak domestic economic outlook associated with constricted consumer sentiment will drag significantly on total vehicle sales in Greece, with volumes of 89,670 units forecast in 2019 remaining well below pre-crisis levels of some 315,000 units.
|Total Vehicle Sales Low Volume Growth|
|Total Vehicle Sales By Segment|
|e/f = BMI estimate/forecast. Source: AMVIR, BMI|
Greece Commercial Banking
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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 food and drink industry will return to growth in 2016, following five years of contraction. The recovery in household spending will enable consumers to afford more discretionary food products, while rising health awareness will impact the soft drinks sector. Nonetheless, this will reflect a stabilisation process rather than a full-blown recovery, and investment opportunities will remain weak.
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Greece Freight Transport
The implementation of a third bailout agreement between Greece and the troika of international lenders (the IMF, EU Commission, and ECB) has eased the immediate pressures on the Greek economy and its key sectors. Greece's current account will remain firmly in surplus over the short term, reducing the potential for funding strains to emerge in the financial account. This will mainly reflect capital controls restricting imports. The surplus is forecast to narrow gradually as capital controls are eventually lifted and as modest economic recovery gains traction. Nevertheless, the country's longer-term economic outlook remains poor, and the result of the September election is set to solidify this view.
Export growth will be one of the key drivers of a recovery in the Greek economy. We believe there will be moderate growth in trade over the medium term, with export outpacing import growth at 3.0% and 4.0%...
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...
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.
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Oil & Gas
Greece Oil & Gas
BMI View: Gas midstream and the downstream segments are the bright spots in Greece's O&G landscape, with upstream on the whole languishing in the background. EU funds are backing some trans-national gas projects (the Gas Interconnector Greece-Bulgaria pipeline, the Trans Adriatic Pipeline), which in turn will give impetus to the domestic gas infrastructure market development in the coming years. Downstream leads Greece's exports income with record profits for domestic refiners, though the windfalls may prove to be short-lived as the European fuels demand slows.
Pharmaceuticals & Healthcare
Greece Pharmaceuticals & Healthcare
BMI View: A poor record of implementing new legislation and the enduring public scepticism of generic medicines indicate that the country's push to increase the prescription of generic medicines to 60% by December 2016 will fail to produce the desired generic medicine uptake in the face of austerity. The government's focus on increasing the consumption of generic medicines alongside persistent debt problems within the health system highlights Greece as a challenging market for innovative drugmakers.
Headline Expenditure Projections
Pharmaceuticals: EUR4.95bn (USD5.44bn) in 2015 to EUR4.67bn (USD5.00bn) in 2015, -5.5% in local currency terms and -8.1% in US dollar terms. Forecast revised upwards from Q415 due to improved macroeconomic...
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...
BMI View: After a decade of impressive growth, the Greek non-hydro renewables industry came nearly to a standstill in 2014 and 2015, 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 the industry's potential, we believe Greece's non-hydro renewables expansion will remain anaemic over the coming decade.
BMI View: Our Q2 2016 update on the Greek telecommunications market presents a revised outlook for the country's mobile and fixed-line subscriber sectors. We have also extended all of our forecasts through to 2020. The revised mobile and fixed-line subscriber forecasts are based on a stronger performance for both sectors in 9M15. The Greek mobile market added a healthy 517,000 new subscribers in the first nine months of 2015. Meanwhile, fixed-line connections contracted at a slower rate than we had previously predicted. We remain cautiously optimistic about the Greek market in general. The mobile 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 had launched 4G services by the start of 2015. Operators are expected to put a growing emphasis on the...
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,...