Greece: macroeconomic trends and business environment

Transcription

1 ΙΔΡΥΜΑ ΟΙΚΟΝΟΜΙΚΩΝ & ΒΙΟΜΗΧΑΝΙΚΩΝ ΕΡΕΥΝΩΝ FOUNDATION FOR ECONOMIC & INDUSTRIAL RESEARCH 1 Τσάμη Καρατάσου 11, Αθήνα, Tηλ.: , Fax: , 11 Tsami Karatassou, Athens, Greece, Tel.: , Fax: Greece: macroeconomic trends and business environment Nikos Vettas General Director of IOBE Professor, Athens University of Economics and Business (vettas@iobe.gr, th IFIAR Inspection Workshop Hellenic Accounting and Auditing Standards Oversight Board (HAASOB) Athens, February 8 th, 217

2 Economic Sentiment Indicator ( Economic Sentiment - EU Economic Sentiment - Euro Area Economic Sentiment - Greece Sources: ΙΟΒΕ / DG ECFIN, European Commission

3 GDP per capita, 21 prices Source: Eurostat Germany Greece Portugal 3

4 GDP per capita, current prices Source: Eurostat Germany Greece Portugal 4

5 Key Macroeconomic and Financial Figures Key Macroeconomic Figures * 217* GDP Unemployment General Government Balance Current Account Balance Harmonised Inflation Gross Fixed Capital Formation Including State aid to the banking sector on the deficit * FEIR/IOBE forecasts Sources: Eurostat/European Economic Forecast, autumn 216, European Commission 5

6 Investment Greece and the Euro area Gross fixed capital formation % GDP 3% 25% 2% 15% 1% 5% % Greece Euro area (12 countries) Source: AMECO 6

7 Investment? bn 8 % of GDP 3% ,1% 23,7% 22,7% 22,7% 22,4% 54,5 54,1 45, 46, 43, 21,1% 48,4 24,7% 25,9% 23,6% 65,1 59,9 59,1 18,1% 17,% 43,2 38,5 14,7% 3,1 12,% 11,2% 11,6% 1,6% 25% 2% 15% 1% ,9 2,6 21,5 19,6 5% % Source: Eurostat Highest investment level in 27 ( 65.1 bn.) Highest level of investment as a % of GDP in the same year (25.9%) Significantly lower in 215 ( 19.6 bn. and 1.6% of GDP) 7

8 % of labour force Unemployment Greece Euro Area-19 Sources: European Economic Forecast, autumn 216, European Commission 8

9 Determinants of GDP change in Greece 4 2 % Labour Quality Capital Services (ICT Assets) Growth of Total Factor Productivity Labour Quantity Capital Services (Non-ICT Assets) Source: The Conference Board Growth and Total Factor Productivity database 9

10 bn National wealth of Greece (21 prices) Non-financial fixed assets Net financial assets National wealth Note: Excludes items that are not included in the definition of an asset in ESA 21 (human capital, natural resources that are not considered as economic assets, consumer durables and contingent assets and liabilities, which are not financial assets and liabilities) and items for which data was not available for Greece (valuables and non-produced non-financial assets, such as natural resources, contracts, leases, licences, goodwill and marketing assets). The constant price values are estimated using the GDP deflator. Source: Eurostat, data processing: IOBE 1

11 Open economy? % GDP a' quart. 216 b' quart. 216 Germany Ireland Greece France Cyprus Portugal Slovakia Source: Eurostat The sum of imports and exports as a % of GDP in Greece remains on of the smallest in the Euro area periphery The Greek economy should be transformed to a small, open economy. However, it remains a closed economy

12 % GVA Public sector gross value added 12% 11% 1% 9% 8% 7% 6% 5% 4% Euro Area -19 Greece Source: Eurostat In comparison to 28, the contribution of the public sector to economic activity in 214 was higher by 2 percentage points of domestic Gross Value Added The importance of the public sector remains higher in Greece than in the Euro area Between , the distance from the Euro area average doubled : from 2 to 4 percentage points of domestic GVA 12

13 General Government Expenditure and Revenue: Primary Balance % GDP % GDP Gen. Government Expenditure (l.h.s.) Gen. Government Revenue (l.h.s.) Primary Balance (r.h.s.) 13

14 % GDP Direct Taxation 14% 12% 1% 8% 6% 4% 2% % Direct Taxation - Total Profits-Income Real Estate Property Past Years * Projection ** Forecast Source: State Budget, , Ministry of Finance 14

15 % GDP Public spending categories (% GDP) Defence Health Education Source: Eurostat 15

16 Harmonised Inflation % Greece Euro Area-19 Sources: Eurostat/European Economic Forecast, autumn 216, European Commission 16

17 Trade Balance (goods services) bn ,6-4,5-4,7-3, -3,7-3, ,9-19,5-24, , Balance Imports of goods and services (21 prices) Exports of goods and services (21 prices) Source: AMECO 17

18 bn mil. tons Exports of Goods Value vs. volume Value in Euros Quantity in KG Source: Eurostat Change in the value of exports, : +33% Change in the volume of exports, : +51% 18

19 Foreign direct investment 4 % GDP FDI as a % of GDP Germany 3.% 1.7% Ireland 21.1% 3.7% Greece.9%.7% Spain 4.2% 2.3% Portugal 3.7% 4.4% -5 Ireland Greece Spain Axis Title Portugal Germany * Ireland: 72.3% of GDP Source: Eurostat 19

20 Real effective exchange rate Source: Eurostat Real Effective Exchange Rate (deflator: CPI - against 37 trading partners) Real Effective Exchange Rate (deflator: unit labor costs in total economy - against 37 trading partners) 2

21 Weak contribution of exports to GDP 1% GDP components (% change) - Greece 6% GDP components (% change) - Portugal 4% 5% 2% % % -2% -5% -4% -1% -6% -8% -15% Consumption Gross capital formation Exports of goods Exports of services Imports GDP -1% Consumption Gross capital formation Exports of goods Exports of services Imports GDP Source: Eurostat 21

22 GDP change % CY FR DE GR IE IT PT ES Country Avg. Growth Rate Country Avg. Growth Rate Germany 1.7% France 2.3% Ireland 9.6% Italy 1.7% Greece 3.6% Cyprus 4.2% Spain 3.8% Portugal 2.4% Source: The Conference Board Growth and Total Factor Productivity database 22

23 % GDP Gen. Government balance Euro area periphery Ireland Greece Spain Cyprus Portugal Sources: Eurostat/European Economic Forecast, autumn 216, European Commission 23

24 % GDP Current account balance Euro area periphery Ireland Greece Spain Cyprus Portugal Sources: AMECO 24

25 % GDP Gen. Government debt Euro area periphery Ireland Greece Spain Cyprus Portugal Sources: Eurostat/European Economic Forecast, autumn 216, European Commission 25

26 Perspectives : rebalancing and recovery 2. Medium-term: start from a low basis. Very significant progress has been achieved but sources of uncertainty remain, as well as pressure due to finance constraints 3. Low domestic savings: need for all sorts of foreign investment and mobilization of domestic financial resources 4. Intensity of competition in products markets need for new investment 5. Challenges in the global environment deleverage trends 6. Credibility of economic policy: the implications of the Euro-zone participation for Greece 7. Reforms also needed and expected at the Eurozone level