Business Monitor International


Greece Business Forecast Report

Published 16 December 2014

  • 59 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Greece Business Forecast Report

Core Views

  • We expect a return to positive economic growth in 2014 following six years of depression. Thereafter we expect growth to remain well below the pre-crisis range.

  • Underpinning positive economic growth will be a stabilisation in domestic demand as well as a positive contribution from the current account.

  • The prospect of further spending cuts and tax hikes will ensure that demonstrations and national strikes remain a key feature of the political landscape over the medium term.

Major Forecast Changes

  • There are no major forecast changes this quarter.

Key Risks To Outlook

  • Upside Risks To Deficit Forecasts: The severity of the fiscal consolidation programme and the public backlash mean that the scope for slippage will remain pronounced.

  • Downside Risks To Economic Growth Forecasts: A fragile recovery in the eurozone could yet go in reverse unless policymakers push forward with structural reforms and the ECB provides additional monetary stimulus. A failure to do so would risk prolonged stagnation in the euro area, which will in turn dent demand for Greek exports and further undermine the recovery.

Macroeconomic Forecasts (Greece 2012-2015)
Indicator 2012 2013 2014f 2015f
National Sources/BMI
Real GDP growth, % y-o-y -7.0 -3.9 0.2 1.2
Nominal GDP, EURbn 193.3 182.1 185.0 181.8
Consumer price inflation, % y-o-y, eop 0.3 -1.7 -0.3 0.2
Exchange rate EUR/USD, eop 0.81 0.75 0.79 0.83
Budget balance, % of GDP -8.9 -12.7 -11.2 -11.0
Current account balance, % of GDP -2.4 0.8 1.3 2.1

Table of Contents

Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Index
7
Domestic Politics
8
Political Crisis Looming
8
While a gradually recovering economy has improved social stability in Greece over the past few months, new political risks are
While a gradually recovering economy has improved social stability in Greece over the past few months, new political risks are
emerging
Early parliamentary elections look increasingly likely, which could usher in a government led by the radical Syriza
party
Table: Political Overview
8
Long-Term Political Outlook
9
A Decade Of Austerity And Instability
9
Greece's political landscape is likely to become more tumultuous in the coming years
The legacy of fiscal profligacy and economic
distortions will leave an indelible mark on the Greek economy and society, with political voices potentially becoming more fragmented
We therefore expect a prolonged bout of austerity and instability in the decade ahead
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Index
13
Economic Activity
14
Recovery On A Knife Edge
14
A gradual improvement in household spending will help Greece emerge from depression in 2015 and 2016
But a lack of significant
growth drivers means growth rates will remain anaemic over the coming years, with persistently weak eurozone growth posing risks to
growth drivers means growth rates will remain anaemic over the coming years, with persistently weak eurozone growth posing risks to
this already tepid outlook
Table: Economic Activity
14
Balance Of Payments
16
Current Account To Remain In Surplus
16
Greece's current account will move further into surplus in 2015 and 2016, due to weak imports and the robust tourism sector
Table: Balance Of Payments
16
Monetary Policy
17
Another Year Of Deflation
17
Greece will remain in deflationary territory in 2015
Expansionary ECB monetary policy will be insufficient to overcome weak demandside
pressures, made worse by declining food and energy prices
Table: Monetary Policy
17
Regional Economic Outlook
19
AQR Not A Game Changer
19
The positive results of the AQR will not lead to a marked increase in demand for credit across the eurozone
Rather, deflationary fears
and declining growth expectations across the bloc will ensure that demand-side pressures remain tepid
Chapter 3: 10-Year Forecast
21
The Greek Economy To 2023
21
Lower Growth Path To Emerge Over The Long Term
21
With international credit conditions unlikely to return to pre-2008 levels over the foreseeable future, we expect both consumer and
With international credit conditions unlikely to return to pre-2008 levels over the foreseeable future, we expect both consumer and
investment spending to remain subdued over the long term
Table: Long-Term Macroeconomic Forecasts
21
Business Monitor International Ltd www
com 3
Contents
Contents
Chapter 4: Operational Risk
23
SWOT Analysis
23
Operational Risk Index
23
Operational Risk
24
Table: Developed States - Labour Market Risk
24
Table: Developed States - Logistics Risk
27
Table: Developed States - Crime And Security Risks
29
Table: Developed States - Trade And Investment Risk
32
Chapter 5: Key Sectors
35
Infrastructure
35
Table: Construction And Infrastructure Industry Data
36
Table: Construction And Infrastructure Industry Data
37
Oil & Gas
39
Table: Oil Production
41
Table: Oil Production
41
Table: Gas Production
42
Table: Gas Production
42
Other Key Sectors
43
table: Pharma Sector Key Indicators
43
table: Telecoms Sector Key Indicators
43
table: Defence and Security Sector Key Indicators
43
table: Food and Drink Sector Key Indicators
44
table: Autos Sector Key Indicators
44
table: Freight Key Indicators
44
Chapter 6: BMI Global Assumptions
45
Global Outlook
45
Warning Signs Growing
45
Table: Global Assumptions
45
Table: Developed States, Real GDP GrowtH, %
46
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
46
Table: Emerging Markets, Real GDP Growth, %
47

The Greece Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Greece and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Greece's economic, political and financial prospects through end-2018, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Greece's economic and industry growth through end-2018.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Greece's country risks against regional peers using BMI's country comparative Risk Rankings system.
  • Evaluate external threats to doing business in Greece, including currency volatility, the commodity price boom and protectionist policies.

The Greece Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Greece economic policy-making and performance impact on corporate profitability over 2014-2018?

BMI provides our fully independent 5-year forecasts for Greece through end-2018 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Greece Business Forecast Report features BMI's forecasts with supporting analysis for 2014 through to end-2018, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Rankings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2018 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Greece and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Greece, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Greece over the next 5-years?

BMI's Greece country Risk Rankings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Greece Market - Political Strengths, Weaknesses, Opportunities and Threats facing Greece.
  • Political Stability and Risk Assessment - BMI's Risk Rankings assess explicit short- and long-term risks to political stability; latest ankings, rankings and trends for Greece's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark Greece's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Rankings with SWOT Analysis - Business Environment Risk Rankings for Greece, benchmarked against rankings for regional neighbours.

Country Competitiveness - Competitiveness of Greece's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Rankings.

Key Sector Outlook

Which industry sectors in Greece will grow fastest, and where are the major investment opportunities in the market?

BMI's identifies investment opportunities in Greece's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry with developments over 2009-2013, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2014-2018, using BMI's proprietary industry modeling technique, which incorporates all key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across, and within, each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express