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 creditors have delayed offering Greece any substantial concessions on bailout conditions, due to domestic political concerns.
Without offering significant debt relief, Greece's creditors have ensured that Greece's economy will remain in the doldrums and that the country will need further bailouts by the time its current deal expires in 2018.
Partially as a result of this, we expect Greece's economy to remain stuck in the doldrums over the next few years.
This view is underpinned by severe structural issues facing the country, namely an unsustainable government debt load, a dire demographic profile, and Greece's scant progress improving productivity over the past few years.
Inflationary pressures will gradually...
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 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 towards the end of our forecast period to 2020. As the Greek economy finds some relative stability, our forecasts remain unchanged from our last quarterly update.
Poultry consumption from 2016 to 2020: up 17.6% to 208,200 tonnes. The cheaper price of poultry meat will see it continue to gain ground against beef and pork. In 2017 we...
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
|Date||Total assets||Client loans||Bond portfolio||Other||Liabilities and capital||Capital||Client deposits...|
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 experience a gradual improvement over our five-year forecast period to 2020 on the back of a tepid consumer outlook. A slow recovery in consumer spending will further dampen our outlook for the MGR sector, particularly for larger store formats. The growing demand for lower-cost products such as private labels will benefit the underdeveloped discount store format as supermarkets begin to struggle to maintain profit margins.
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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: Greece's insurance market is showing signs of stabilising as the economy starts to recover and grow again, albeit at a snail's pace. We forecast positive growth in non-life premiums in 2016 and through the remainder of the forecast period, lifted in large part by growth in vehicle ownership and hence new compulsory motor insurance policies. The life sector will remain slightly behind given that it is a discretionary and non-essential item. Over the long-term we expect falling unemployment levels and rising household incomes to gradually support the development of the market, particularly within smaller lines such as health insurance, where density is extremely low at present. However, significant downside risks exist, not least the prospect of further austerity measures, which will eat away at disposable...
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: The start of construction work on the Trans Adriatic Pipeline (TAP) marks a milestone for the Greek midstream sector and our outlook for its natural gas sector. We reiterate our view that natural gas, especially midstream, will be the largest growth opportunity in the Greek energy space with TAP beginning construction in June and DEPA focusing on growing the domestic gas market infrastructure. However, tax hikes on gas consumption for large industrial users will temper demand, which is presenting a downside risk to our natural gas consumption forecasts.
Pharmaceuticals & Healthcare
Greece Pharmaceuticals & Healthcare
BMI View: The government's focus on increasing the consumption of generic medicines and poor financial administration highlights Greece as a challenging market for innovative drugmakers. Despite an urgent need to reduce pharmaceutical and healthcare spending, enduring public scepticism of generic medicines will prevent targeted reduction in patented drug usage. Moreover, dissatisfaction among the public and professionals over staff shortages, poor wages and pension reform within the healthcare sector, coupled with corruption issues and the ongoing migrant influx, signify an unhealthy outlook.
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...
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: The growth outlook for Greece's beleaguered renewable energy sector remains extremely weak. A lack of public spending capacity brought on by several years of non-existent economic growth combined with a poor private investment environment mean there are very few projects in the pipeline and as a result we forecast only minimal gains in non-hydropower renewables capacity and generation over the forecast period through to 2025.
BMI View: We retain our core outlook for the Greek telecommunications market in our Q3 2016 report update. Our outlook is based on the stronger performance of the market in 2015, as the mobile market added over 685,000 new subscribers in 2015, a healthy number when compared to the 2014 losses. 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 promotion of 3G and 4G subscriptions and services over the next five years as a way of winning and retaining customers and boosting revenue.
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,...