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 grow only slightly in 2016, following a significant recession in 2015.
Although agreeing a third bailout has reduced uncertainty surrounding the country's eurozone membership, tough fiscal conditions attached to the deal will dampen growth over the coming years.
Greece's massive debt pile will remain unsustainable, unless the country is offered a formal debt haircut from its creditors. Eurozone opposition means this is unlikely to happen.
On the plus side, Greece's external position is now much improved, as the collapse of the current account deficit has reduced the country's annual financing requirement.
Deflation will persist for some time to come, as the country continues its painful internal...
Greece Industry Coverage (16)
BMI View: Domestic demand weakness amid the ongoing economic turmoil will continue to weigh on the country's livestock sector. We are also bearish on the country's sugar production outlook over the coming years. The abolishment of the EU sugar quota in 2017 is likely to lead to further declines in sugar prices, weighing on producers' willingness to increase sugar output. Meanwhile, the removal of the EU's milk quota is unlikely to result in a significant increase in milk production in Greece, since the country has been producing less than what the quota has allowed.
Poultry consumption to 2019: up 17.2% to 201,500 tonnes. The cheaper price of poultry meat will see it continue to gain ground against the more traditionally favoured beef and pork.
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: We have revised down our real GDP growth forecast for Greece to a negative 0.3% outturn in 2015, from a 0.4% growth forecast previously. We have long warned of the risks posed to Greece's economic recovery by ongoing bailout negotiations, and have been below consensus on real GDP growth as a result. We now see little hope that Greece can avoid re-entering recession after a positive 0.8% growth outturn last year and a 'Grexit' would see an even more severe economic contraction in 2015.
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%;...
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 Industry View: Greece has the fifth largest medical device market in Central and Eastern Europe but growth has been constrained by the economic crisis. The market is heavily reliant on imports, which contracted in 2014, preceded by a rise in 2013 and considerably falls between 2009 and 2012. The current heightened economic and political uncertainty is unlikely to improve investment in healthcare in the short term. Domestic manufacturers are mainly small scale operations focusing on low value, high volume disposables....
Oil & Gas
Greece Oil & Gas
BMI View: We reiterate our negative outlook for the Greek upstream sector as the nebulous fiscal and regulatory environment at a time of low oil prices will dent industry interest in the licensing round due in July 2015. Greece's importance in the regional oil and gas sector lies in the scale of its downstream and we forecast exports of fuels to grow in 2015 as the domestic market contracts for another year. Domestically, jet fuels consumption will experience the strongest growth according to our forecasts as a result of a booming tourism sector.
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: With the Greek economy making a slight turnaround, we expect an improvement of the wider macroeconomic situation to also support a recovery of the commercial real estate market in the long term. However, in the short term, rental rates are expected to decline almost across the board, with the only exception in the Thessaloniki retail market with stability expected into 2016. Although there are several positive indicators, the economic recovery remains highly fragile and uncertainty continues to dominate the market atmosphere.
The commercial real estate sector closely mirrors the general economic trends of the country and as such has suffered significantly in the Greek economic crisis over the past six years. Over the past two years indicators have...
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 continue to hold a largely bearish view towards the Greek telecoms sector as a whole, with healthy returns on investment precluded by its challenging economic climate. While the mobile market showed growth, we believe that there remain siginificant numbers of inactive subscriptions. Other concerning trends point to the shift away from postpaid to lower value prepaid subscriptions, meaning consumers are spending less. The three major operators have all launched 4G services as of March 2015, but in this environment the outlook is less than optimal. In this environment, the Greek telecoms regulator is starting to prepare an auction for spectrum in the 1,800Mhz band expected for next...
BMI View: Greece's tourism market is very well established, with an excellent range of accommodation options and strong transport links. This has helped the industry to weather the storm created by Greece's ongoing bailout negotiations and persistent economic and political uncertainty. Visitor numbers are set to increase over the forecast period, boosting vital tourism-related expenditure; however, the outlook is less positive for the largely stagnant outbound travel market. Any failure to complete a deal with creditors could see Greece's tourism industry, and wider economy, facing enormous challenges.
The tourism market in Greece is well developed, and the country has long been one of the...