NATIONAL BANK OF GREECE | Greece: Macro Flash

NBG | Economic Analysis Department

Greece Macro Analysis Team

86 Eolou Str., 102 32 Athens, Greece

GREECE Macro Flash

GDP Q4:2017 N A T I O N A L B A N K O F G R E E C E

Greece’s recovery gains

momentum, buoyed by

increased business

activity

Nikos S. Magginas PhD Head of Greece Macro Analysis (+30210) 334 1516 e-mail: nimagi@nbg.gr Effrosyni Alevizopoulou PhD (+30210) 334 1620 e-mail: alevizopoulou.e@nbg.gr Aikaterini Gouveli MSc (+30210) 334 2359 e-mail: gouveli.aikaterini@nbg.gr Eleni Balikou MSc (+30210) 334 1198

e-mail: balikou.eleni@nbg.gr

GDP increased by 1.9% y-o-y in Q4:2017 and by 1.3% y-o-y in FY:2017, the strongest performance in 10 years, despite tighter-than-initially-expected fiscal conditions.

Gross fixed capital formation rebounded impressively in Q4:2017 (+28.9% y-o-y), contributing 3.3 pps to annual GDP growth in this quarter on the back of buoyant non-residential investment (+31.4% y-o-y, the strongest rise in 11 years), which increased its share in GDP to an 8-year high of 14.0%.

The net contribution of investment in GDP growth in Q4:2017 is still sizeable (1.7 pps), even after subtracting the impact from higher imports of capital goods (mainly transportation equipment) and other inputs related to investment. On an annual basis, investment, along with inventory accumulation, contributed 0.7 pps to FY:2017 growth (c. 50% of total output growth adjusted for their corresponding import content).

Increasing business profitability, higher levels of capacity utilization and an effective acceleration in public investment activity – mainly due to a shift of funding from 2017 – are expected to support average annual growth in total investment of 10.8% y-o-y in FY:2018.

On the other hand, consumer spending decelerated over the course of 2017, declining by 1.0% y-o-y in Q4:2017 and remained flat in FY:2017, for a second consecutive year, reflecting still significant fiscal pressure and a negative impact on disposable income from positive CPI inflation, which offset positive labor market trends.

According to NBG estimates, average GDP growth in FY:2018 is estimated in the vicinity of 2.0% y-o-y, of which 0.5 pps corresponds to a positive carry from FY:2017.

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GDP growth decomposition by expenditure component

Consumption Net Exports Investment

Inventories Other expenditure Growth

contributions in pps

Overview of latest macroeconomic trends in pages 5-13

NATIONAL BANK OF GREECE | Greece: Macro Flash

GREECE | NBG Macro Flash |March 2018| p. 2

Greece’s recovery is continuing, with

GDP increasing by 1.9% y-o-y in

Q4:2017

_______________________________________________

Greece’s gross fixed capital

formation rebounded impressively in

Q4:2017, bringing the share of non-

residential investment to GDP to an

8-year high of 14.0%

_______________________________________________

The acceleration in public

investment activity in Q4:2017 is

estimated to have added about 0.3

pps in GDP growth on an annualized

basis

_______________________________________________

Greece’s economy continues to gain momentum, buoyed by

increased business activity that compensates for subdued

private consumption

Greece’s recovery is continuing, with GDP increasing by 1.9% y-o-y

in Q4:2017. Output expanded for a fourth consecutive quarter

(+0.1% on a seasonally-adjusted quarterly basis). In FY:2017, GDP

increased by 1.3% y-o-y, the strongest performance in 10 years,

despite tighter-than-initially-expected fiscal conditions reflected in

the estimated fiscal tightening of 0.3% of GDP in FY:2017 (an

estimated improvement in the General government primary

surplus, adjusted for one-offs, from 2.3% of GDP in 2016 to 2.6% of

GDP in 2017). The analysis that follows indicates that a key growth

driver is business activity, combined with higher investment

spending, while consumer spending remains relatively weak.

Indeed, gross fixed capital formation rebounded impressively in

Q4:2017 (+28.9% y-o-y), contributing 3.3 pps to annual GDP growth

in this quarter, following a temporary slowing in Q2 and Q3:2017.

Importantly, non-residential investment was the main source of

investment (+31.4% y-o-y, the strongest rise in 11 years), bringing

the share of non-residential investment to GDP to an 8-year high of

14.0%. The net contribution of investment in Q4 GDP growth is still

sizeable (1.7 pps), even after subtracting the impact from higher

imports of capital goods and other inputs related to investment. On

an annual basis, investment, along with inventory accumulation,

contributed 0.7 pps to FY:2017 growth (c. 50% of total output

growth adjusted for their corresponding import content). Indeed, it

appears that spending on new transportation equipment has been

the dominant driver of investment growth in both Q4:2017 and

FY:2017. The acceleration in public investment activity in Q4:2017

is estimated to have added about 0.3 pps in GDP growth on an

annualized basis.

In this vein, it is encouraging that business activity showed further

signs of sustainable improvement in Q4:2017. Indeed, gross

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GDP growth: y-o-y and q-o-q

GDP (q-o-q, s.a., right axis)

GDP growth (y-o-y, s.a., left axis)

y-o-y q-o-q

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-40

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0

20

40

0

4

8

12

16

20

24

28

Q2:

2000

Q3:

2001

Q4:

2002

Q1:

2004

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2007

Q1:

2009

Q2:

2010

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2011

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2012

Q1:

2014

Q2:

2015

Q3:

2016

Q4:

2017

y-o-y% GDP

Total investment excl. residential construction

Total investment excl. residential construction(%GDP, left axis)Total investment excl. residential construction(y-o-y, right axis)

0

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14

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20

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2010

Q4:

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2014

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2015

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2015

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2016

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2016

Q2:

2017

Q4:

2017

% GDP

GFCF & PIP disbursements as % of quarterly GDP

PIP Disbursements (% GDP, right axis)

GFCF (% GDP, left axis)

% GDP

NATIONAL BANK OF GREECE | Greece: Macro Flash

GREECE | NBG Macro Flash |March 2018| p. 3

Spending on new transportation

equipment has been the dominant

driver of investment growth in both

Q4:2017 and FY:2017

_______________________________________________

Capacity utilization in the Greek

industry in H2:2017 exceeded its

long-term average and, in

conjunction with a new improvement

in business conditions in Q1:2018,

presages a further increase in

investment in 2018

_______________________________________________

Business activity showed further

signs of sustainable improvement in

Q4:2017

_______________________________________________

operating surplus and mixed income created by the corporate

sector – a good proxy for their profitability and thus, of their

willingness and capacity to invest – increased by 2.0% y-o-y in

Q4:2017 and by 1.6% y-o-y, on average, in FY:2017, recording the

first annual expansion since 2008. Moreover, the level of capacity

utilization has increased to levels which in Q4:2017 exceeded the

long-term average in specific, more competitive, industrial

subsectors, while residential construction is also expected to

bottom, as indicated by an average increase in residential building

permits issuance (17.7% y-o-y in 11M:2017). Finally, public

investment spending is also expected to increase by 26.9% y-o-y in

FY:2018 on a cash basis (mainly due to a shift of EU funding and

related payments from 2017). In line with these positive trends,

total gross fixed capital formation is expected to grow by a healthy

10.8% y-o-y in 2018, according to NBG estimates.

On the other hand, consumer spending remains weak, decelerating

over the course of 2017, declining by 1.0% y-o-y in Q4:2017 and by

-0.4% s.a. q-o-q -- following declines of -0.5% q-o-q and -0.2%

q-o-q, respectively, in Q3 and Q2:2017. In FY:2017, private

consumption remained flat, for a second consecutive year,

reflecting still significant fiscal pressure (personal taxes and social

security contributions increased by an estimated 0.2% of GDP in

FY:2017 compared with 2016). Moreover, the return of consumer

price inflation to positive territory (1.1% y-o-y in 2017), following 4

years of deflation, took an additional toll on household disposable

income. This offset the supportive impact of higher employment

(2.2% y-o-y on average in 11M:2017). This trend suggests that the

financial position of Greek households is still fragile. Sluggish private

consumption is expected to continue in 2018, in view of the

continuing fiscal effort needed to achieve the 3.5% primary surplus

target, combined with subdued wage trends in the face of still high

unemployment. In fact, the effective increase in fiscal pressure is

relatively higher for medium-income earners, who typically play a

central role in the consumption recovery process.

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2015

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2016

Q4:

2016

Q2:

2017

Q4:

2017

contribution in pps

Contribution in annual change in GFCF by investment component

Other investment (in pps)Transport equipment (in pps)Machinery & technology equipment (in pps)Residential construction (in pps)Non-residential construction (in pps)GFCF (y-o-y)

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PMI & Capacity utilization

PMI, deviat. from 50 (left axis)

Capacity utilization (right axis)

Index%

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y-o-y

Gross value added by sector of economic activity

Industrial (left axis)Construction (left axis)Household services (left axis)Accommodation, trade, transportation (left axis)Other sectors (left axis)Total value added (y-o-y, right axis)

contributionsin pps

NATIONAL BANK OF GREECE | Greece: Macro Flash

GREECE | NBG Macro Flash |March 2018| p. 4

Increasing business profitability will

support investment decisions in 2018

_______________________________________________

A further strengthening in economic

sentiment and sustainable

employment growth point to an

acceleration in GDP growth in 2018

_______________________________________________

Net exports subtracted 0.4 pps from GDP growth in FY:2017 (and

0.0 pps in Q4:2017), despite the solid performance of the tourism

sector and healthy growth in goods exports, as the annual growth

in imports of goods and services outpaced that of exports (7.5%

y-o-y and 6.9% y-o-y, respectively, in constant price terms).

NBG Economic Analysis’ “high frequency indicator” of economic

activity, incorporating the latest information from monthly

macroeconomic data releases for early 2018, points to an

acceleration in GDP growth to c. 2.0% y-o-y in Q1:2018. This

projection mainly reflects the increase in economic sentiment and

manufacturing PMI indices, to 3½ and 17½ year highs, respectively,

in February 2018. In addition, favorable prospects for tourism

activity, reflected by a double-digit increase in early bookings for

2018, along with favorable growth trends in the euro area, are

expected to offset the drag on growth from the additional fiscal

effort and higher import spending that typically accompanies the

recovery process. Employment growth should continue at the

current pace of c. 2.0% y-o-y, reducing unemployment to below

20%, on average, in 2018. The above factors are estimated to bring

GDP growth in FY:2018 in the vicinity of 2.0 % y-o-y, of which 0.5

pps corresponds to a positive carry from FY:2017.

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y-o-y y-o-y

GFCF & gross operating surplus

Gross fixed capital formation (2q m.a., right axis)

Gross oper. surplus & mix. income (2q m.a.,left axis)

62

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92

102

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2018

:2Μ

y-o-y

Employment, GDP growth & economic sentiment

Employment growth, y-o-y (left axis)*

GDP growth, y-o-y (left axis)

EC Economic sentiment indicator (right axis)

Index

*Q4:2017: October-November 2017 data

NATIONAL BANK OF GREECE | Greece: Macro Flash

GREECE | NBG Macro Flash |March 2018| p. 5

GREECE

Macro View - Economic Outlook | March 2018

Greece’s recovery on track, supported by investment activity, policy

credibility improves and financial markets assign an increasing

probability of a successful completion of the 3rd economic adjustment

programme

NATIONAL BANK OF GREECE | Greece: Macro Flash

GREECE | NBG Macro Flash |March 2018| p. 6

Greece: Tracking the economy’s cyclical position

Au

g-15

Sep

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Oct-15

No

v-15

Dec-15

Jan

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Feb

-16

Mar-16

Ap

r-16

May-16

Ju

n-16

Ju

l-16

Au

g-16

Sep

-16

Oct-16

No

v-16

Dec-16

Jan

-17

Feb

-17

Mar-17

Ap

r-17

May-17

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n-17

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Sep

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Oct-17

No

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Dec-17

Jan

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Feb

-18

PMI (index level) 39,1 43,3 47,3 48,1 50,2 50,0 48,4 49,0 49,7 48,4 50,4 48,7 50,4 49,2 48,6 48,3 49,3 46,6 47,7 46,7 48,2 49,6 50,5 50,5 52,2 52,8 52,1 52,2 53,1 55,2 56,1

Industrial confidence (index level) -30,2 -23,3 -19,6 -16,6 -13,6 -10,1 -10,2 -7,8 -7,8 -11,6 -9,1 -7,3 -5,1 -6,2 -4,7 -7,8 -5,7 -5,0 -5,1 -6,7 -5,6 -10,4 -7,3 -2,7 -3,7 -0,7 -4,7 -3,9 0,2 1,2 4,2

Manufacturing production (yoy) 3,7 2,7 -1,0 2,2 5,3 5,0 1,1 -1,7 7,2 7,2 8,9 10,8 3,2 1,9 7,3 1,3 -1,8 0,9 6,4 10,2 -0,3 5,3 3,0 1,8 2,9 2,3 -0,1 1,8 6,3

Industrial production (yoy) 4,2 3,0 -1,7 2,6 6,9 4,1 -2,9 -3,6 3,7 3,5 8,1 5,5 0,5 -0,2 6,9 2,1 2,5 7,1 11,0 10,1 0,8 6,3 1,8 2,1 5,5 3,2 0,7 2,0 0,2

Services confidence (index level) -42,8 -15,1 -14,3 -15,4 -16,6 -5,3 -23,1 -17,3 -13,0 -11,4 -17,5 -8,3 -4,0 -6,9 1,3 3,5 -3,1 -3,2 1,9 6,6 8,9 11,5 9,0 17,4 22,9 15,3 14,4 13,6 13,4 8,9 18,9

Consumer confidence (index level) -64,8 -64,2 -59,6 -64,1 -61,1 -63,9 -66,8 -71,9 -73,7 -71,9 -68,0 -69,2 -70,1 -65,9 -63,6 -66,9 -64,4 -67,8 -73,3 -74,4 -72,2 -69,7 -68,8 -61,5 -57,0 -53,7 -54,0 -53,8 -50,3 -51,0 -53,0

Retail confidence (index level) -31,0 -20,0 -15,3 -12,8 -5,3 -3,4 3,2 3,0 5,6 5,1 4,7 8,2 9,3 15,0 10,7 10,9 9,8 12,9 1,9 2,7 3,0 1,5 -3,4 -1,3 -3,6 0,0 2,0 2,3 -0,4 1,8 2,8

Retail trade volume (yoy) -2,1 -3,3 -2,4 -4,4 0,2 -1,7 -6,8 -1,2 -2,0 -6,3 -3,6 9,5 -2,1 2,4 2,6 4,0 -1,0 -0,1 9,9 -1,2 2,1 0,3 3,7 2,5 0,8 -0,8 -1,0 -2,6 1,8

Construction Permits (yoy) -28,5 -13,1 -38,2 -4,5 67,3 -5,2 8,3 -34,7 -27,3 -39,8 -26,1 38,3 64,4 18,7 5,7 9,4 -25,9 -14,1 -0,1 71,0 22,1 52,7 25,1 10,0 9,5 -4,1 96,7 24,4

House prices (yoy, quarterly series) -6,0 -6,0 -5,1 -5,1 -5,1 -4,4 -4,4 -4,4 -2,5 -2,5 -2,5 -1,5 -1,5 -1,5 -1,0 -1,0 -1,0 -1,9 -1,9 -1,9 -1,2 -1,2 -1,2 -0,6 -0,6 -0,6 -0,3 -0,3 -0,3

Construction confidence (index level) -67,5 -52,8 -49,4 -47,0 -49,1 -37,9 -37,5 -35,9 -45,9 -39,0 -39,8 -55,6 -52,5 -59,5 -67,1 -53,8 -44,0 -45,3 -59,7 -49,8 -53,5 -67,4 -55,6 -39,7 -49,2 -36,9 -44,7 -59,3 -58,3 -50,4 -45,1

Employment (y-o-y) 2,3 2,2 2,7 2,7 3,1 2,7 3,1 3,3 3,0 2,2 2,1 2,3 1,8 1,8 1,0 0,8 0,0 0,6 1,7 2,0 2,1 2,6 2,4 2,0 2,7 2,4 2,6 2,6

Interest rate on new private sector loans (CPI deflated) 6,3 6,5 6,0 5,7 5,3 5,7 5,4 6,2 6,1 5,7 5,6 6,1 5,9 5,7 5,5 5,7 4,8 3,7 3,2 2,7 3,1 3,6 3,5 3,7 3,9 3,7 4,1 3,6 4,3 5,2

Credit to private sector (y-o-y) -3,7 -3,6 -3,6 -3,7 -3,6 -5,0 -4,8 -5,1 -4,6 -3,2 -3,1 -2,6 -2,7 -2,7 -2,8 -2,5 -4,5 -4,7 -4,5 -4,7 -4,4 -4,7 -5,6 -6,1 -6,4 -6,3 -6,4 -7,3 -5,7 -5,8

Deposits of domestic private sector (y-o-y) -27,0 -26,6 -26,9 -27,1 -23,5 -17,5 -13,4 -12,0 -9,0 -6,1 0,5 1,7 2,4 1,6 3,0 3,4 3,4 3,1 2,9 3,1 3,1 3,4 3,4 4,3 4,3 4,6 4,6 4,8 4,7 4,9

Interest rate on new time deposits (households, CPI deflated) 2,7 2,9 2,0 1,7 1,2 1,7 1,4 2,4 2,1 1,7 1,6 1,9 1,8 1,8 1,2 1,6 0,7 -0,5 -0,6 -1,1 -1,0 -0,5 -0,4 -0,4 -0,3 -0,4 -0,1 -0,5 0,0 0,8

Economic sentiment index (EU Commision, Euro area) 104 105 106 105 106 105 103 102 103 104 104 104 103 104 106 106 107 108 108 108 109 109 111 111 111 113 114 114 115 115 114

Exports (other (excl.oil&shipping) y-o-y 6m mov.avg 7,8 5,0 2,2 1,3 -0,6 -1,9 -1,0 -0,6 -0,1 -0,3 -2,0 -1,4 -1,2 0,5 0,9 4,1 5,2 6,5 5,8 6,4 6,1 7,5 10,0 9,6 11,3 9,4 11,8 9,6 9,0

Imports (other (excl.oil&shipping) y-o-y 6m mov.avg -0,9 -5,2 -6,5 -8,1 -10,0 -6,7 -4,1 -2,8 -1,9 -1,5 -0,9 4,1 6,8 8,8 7,9 8,8 10,0 7,6 3,8 4,4 4,6 6,3 6,4 6,1 7,6 6,3 9,2 9,0 9,3

NBG Composite Index of cyclical conditions ► ► ► ► -49,0 -29,0 -27,0 -31,0 -24,7 -24,9 -25,2 -23,5 -22,6 -22,0 -21,7 -20,3 -18,6 -19,8 -19,6 -21,3 -22,8 -19,3 -21,0 -17,3 -13,2 -10,3 -6,7 -5,0 -1,4 2,5 2,7 2,9 3,2 3,3

Color map scale 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 27

Rapid contraction Moderate contraction Slow contraction Stabilization Slow expansion Moderate expansion Rapid expansion

Sources: NBG, BoG, ELSTAT, EU Commission, IOBE

2015 2016 2017 2018f

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1f Q2f Q3f Q4f

GDP (rea l , % y-o-y, s .a .) -0,3 -0,3 1,3 2,0 -0,4 -0,9 1,2 -0,9 0,4 1,5 1,4 1,9 1,9 2,0 2,2 1,8GDP (real , % q-o-q, s .a . ) … … … … -0,6 -0,4 0,5 -0,4 0,6 0,7 0,4 0,1 0,6 0,9 0,6 -0,3

Domestic Demand (y-o-y) -1,0 0,7 1,6 2,0 -0,6 1,7 2,5 -0,6 2,4 0,3 2,1 1,9 1,5 2,4 2,8 1,4Final Consumption (y-o-y) -0,2 -0,4 -0,1 0,7 -1,3 -1,8 2,2 -0,5 0,4 0,4 -0,9 -0,3 0,1 0,3 0,8 1,5 Private Consumption (y-o-y) -0,5 0,1 0,1 0,7 -1,4 -2,1 3,7 0,3 0,9 0,8 -0,2 -1,0 -0,1 0,3 0,9 1,6

Fixed Capital Formation (y-o-y) -0,3 1,5 9,7 10,8 -9,9 13,3 14,7 -9,0 16,5 1,8 -6,5 28,9 12,3 16,2 18,5 -0,9 Residential construction -25,7 -12,4 -8,7 1,8 -16,1 -23,4 -2,9 -3,1 -10,8 -5,1 -7,4 -11,6 … … … …

Total GFCF excluding residential 2,3 2,5 10,8 10,9 -9,4 16,7 15,8 -9,4 18,4 2,2 -6,4 31,4 … … … …

Inventories* (contribution to GDP) -0,9 0,9 0,7 0,1 1,7 2,0 -1,1 1,0 0,3 -0,3 3,7 -1,1 0,0 0,3 0,0 0,2

Net exports (contribution to GDP) 0,7 -1,0 -0,4 -0,1 0,3 -2,7 -1,3 -0,2 -2,0 1,2 -0,7 0,0 0,3 -0,5 -0,6 0,3 Exports (y-o-y) 2,9 -1,9 6,9 6,3 -9,5 -10,3 9,2 4,9 5,2 9,7 7,6 5,3 7,2 6,5 5,5 6,2 Imports (y-o-y) 0,4 1,2 7,5 6,1 -9,5 -1,9 14,0 5,2 11,1 4,8 9,5 4,9 5,5 7,3 7,0 4,7

*also including other statistical discrepancies / Source: ELSTAT, NBG estimatesSource: EL.STAT. and NBG Research Estimates

2016 2017 2018f

Greece: Growth Outlook

NATIONAL BANK OF GREECE | Greece: Macro Flash

GREECE | NBG Macro Flash |March 2018| p. 7

External imbalances have been corrected, fixed capital

formation has picked up in 2017, and private consumption recorded a small decline as a percentage of GDP. A recovery

in business investment is estimated to be the key determinant of the economic performance in 2018-2020

Economic sentiment increased to a 3½-year high, with all major sectoral components of activity showing a

coordinated expansion, which adds to the evidence that the recovery process is gaining pace in early 2018

Industrial confidence increased to its highest level since Q4:2007 and services confidence returned to near its

Q3:2017 high, on the back of favorable tourism prospects and improving demand conditions in domestic services. Consumer sentiment has picked up since Q4:2017, but continues to reflect a still vulnerable position of Greek

households in early 2018

PMI reached a 17½ year high of 56.1 in February 2018, recording the strongest improvement since June 2000,

supported by a broad-based improvement in new orders in both domestic and foreign markets. This significant

improvement indicates that business activity remains on a steadily upward trend, and is likely to gain further traction in the following months, supported by favorable demand

conditions in the euro area

67,065,265,8

68,270,1

69,468,968,4

68,768,7

68,668,8

68,067,2

30

40

50

60

70

80

10

20

30

40

50

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8f

Private consumption (right axis)Investment (left axis)Exports (left axis)Imports (left axis)Public consumption (left axis)

% GDP

Greek GDP spending side decomposition (constant 2010 prices)

% GDP

60

70

80

90

100

110

120

-15

-12

-9

-6

-3

0

3

6

9

12

200

5:Q

3

200

6:Q

4

200

8:Q

1

200

9:Q

2

201

0:Q

3

201

1:Q

4

201

3:Q

1

201

4:Q

2

201

5:Q

3

201

6:Q

4

201

8:Q

1

Economic sentiment and real GDP growth

GDP growth (left axis)

EC Economic sentiment indicator (right axis)

y-o-y index

Sources: EL.STAT., EU Commission

-90

-75

-60

-45

-30

-15

0

15

30

45

-90

-75

-60

-45

-30

-15

0

15

30

45

Jun

-13

Oct

-13

Feb

-14

Jun

-14

Oct

-14

Feb

-15

Jun

-15

Oct

-15

Feb

-16

Jun

-16

Oct

-16

Feb

-17

Jun

-17

Oct

-17

Feb

-18

Greece: main sectoral confidence indicators (ESI components)

Industrial Consumer

Retail Construction

Services

EC sectoral confidence indicators,index level

-40

-30

-20

-10

0

10

-25

-20

-15

-10

-5

0

5

10

Dec

-02

Feb

-04

Apr

-05

Jun

-06

Aug

-07

Oct

-08

Dec

-09

Feb

-11

Apr

-12

Jun

-13

Aug

-14

Oct

-15

Dec

-16

Feb

-18

PMI & Industrial Confidence

PMI, deviat. from 50 (left axis)

Industrial confidence, Index level (right axis)

Index Index

Greece’s GDP increased by 1.3% y-o-y in 2017, the strongest pace in 10 years, buoyed by higher investment spending

and inventory accumulation, which added 1.1 pps and 0.7 pps, respectively, to annual production growth. In Q4:2017,

GDP growth accelerated to 1.9% y-o-y, with investment contributing 3.3 pps, offsetting the drag from lower private

consumption (-0.7 pps or -1.0% y-o-y)

GDP figures from the production side point to a sustainable rebound in business activity, which brought annual value added growth to a 10-year high of 1.3% y-o-y in FY:2017

(from -1.2% y-o-y in FY:2016), on the back of strong expansion in the manufacturing, accommodation,

transportation, retail trade and household services sectors

-5

-3

-1

1

3

5

20

14

:Q3

20

14

:Q4

20

15

:Q1

20

15

:Q2

20

15

:Q3

20

15

:Q4

201

6:Q

1

201

6:Q

2

20

16

:Q3

20

16

:Q4

20

17

:Q1

20

17

:Q2

20

17

:Q3

20

17

:Q4

Composition of output growth by expenditure component

Consumption Net Exports

Investment Inventories*

Growth

contributionsin pps

*including other statistical discrepancies

-3

-2

-1

0

1

2

-3

-2

-1

0

1

2

Q1

:20

15

Q2

:20

15

Q3:

20

15

Q4

:20

15

Q1

:20

16

Q2

:20

16

Q3:

20

16

Q4

:20

16

Q1

:20

17

Q2

:20

17

Q3

:20

17

Q4

:20

17

y-o-y

Gross value added by sector of economic activity

Industrial (left axis)Construction (left axis)Household services (left axis)Accommodation, trade, transportation (left axis)Other sectors (left axis)Total value added (y-o-y, right axis)

contributionsin pps

NATIONAL BANK OF GREECE | Greece: Macro Flash

GREECE | NBG Macro Flash |March 2018| p. 8

Country risk is on a downward trend, benefitting from financial asset valuations and liquidity conditions. This

improvement is expected to support investment decisions, offsetting the continuing pressure from the fiscal side.

However, the economy remains very sensitive to external shocks, such as the increase in financial market volatility

since early-February 2018. Significant progress in cost containment, intensive business restructuring and

consolidation have increased the competiveness of a growing number of larger firms

Manufacturing production increased by 3.3% in FY:2017 for a fourth consecutive year, with activity in the sub-sectors of

basic metals, pharmaceuticals, oil and food products recording the strongest increases of 24.6%, 14.9%, 5.0% and

1.8%, y-o-y, respectively, in the same period. This performance largely reflects increasing export activity, as suggested by external trade statistics and survey data for

manufacturing export orders, which strengthened further in late-2017 and in the first months of 2018

Private construction activity shows signs of bottoming out, despite still weak sentiment. In this regard, private building permits issuance accelerated (23.6% y-o-y, in volume terms, in 11M:2017 and 5.7% y-o-y in Q3:2017, with the residential sub-component recording an increase of 17.7% y-o-y in 11M:2017), presaging the first positive contribution of construction in GDP in 2018, for the first time in ten years

Pressures on house prices eased further in Q4:2017 (-0.3% y-o-y and -1.0% y-o-y in FY:2017), office prices declined by 0.7% y-o-y in H1:2017 (latest available data), and retail space prices showed a small increase (+0.7% y-o-y). However, a slow improvement in households’ financial positions, the still high supply overhang,

along with uncertainty related to the market impact of e-auctions and forthcoming adjustment in imputed real estate prices for tax

purposes, continue to weigh on the recovery process

2

4

6

8

10

12

14

1000

1500

2000

2500

3000

3500

Aug

-15

Oct

-15

Dec

-15

Feb-

16A

pr-1

6Ju

n-16

Aug

-16

Oct

-16

Dec

-16

Feb-

17A

pr-1

7Ju

n-17

Aug

-17

Oct

-17

Dec

-17

Feb-

18

FTSE/ATHEX Large Cap (left axis)

10yr Greek Government bond yield (right axis)

Greek non-financial corp. bond yield based onthe BoG Composite Index (right axis)

%ECB's CSPP

Index

Non-financial corporate, Greek Gov. bond yields & FTSE Large Cap

-3

0

3

6

9

12

-2

0

2

4

6

8

Sep-

16O

ct-1

6N

ov-1

6D

ec-1

6Ja

n-17

Feb-

17M

ar-1

7A

pr-1

7M

ay-1

7Ju

n-17

Jul-1

7A

ug-1

7Se

p-17

Oct

-17

Nov

-17

Dec

-17

Key sectoral contributions in industrial production growth

Fabricated metals (in pps, left axis)Oil products (in pps, left axis)Non-metallic minerals (in pps, left axis)Food (in pps, left axis)Pharmaceuticals (in pps, left axis)Basic metals (in pps, left axis)Chemicals (in pps, left axis)Manufacturing production (y-o-y, right axis)

in pps y-o-y

-80

-60

-40

-20

0

20

40

-80

-60

-40

-20

0

20

40

Q2:

2007

Q1:

2008

Q4:

2008

Q3:

2009

Q2:

2010

Q1:

2011

Q4:

2011

Q3:

2012

Q2:

2013

Q1:

2014

Q4:

2014

Q3:

2015

Q2:

2016

Q1:

2017

Q4:

2017

indexy-o-y

Non-residential construction (y-o-y, left axis)

Cement production (y-o-y, left axis)

Construction confidence (index, right axis)

Cement production, non-residential construction & construction confidence

*Q3:2017 estimate for cement production

-20

-15

-10

-5

0

5

-20

-15

-10

-5

0

5

H1:

2010

H2:

2010

H1:

2011

H2:

2011

H1:

2012

H2:

2012

H1:

2013

H2:

2013

H1:

2014

H2:

2014

H1:

2015

H2:

2015

H1:

2016

H2:

2016

H1:

2017

H2:

2017

Residential & commercial real estate prices

House prices (total, y-o-y)

Office prices (Athens, y-o-y)

Retail prices (Athens, y-o-y)

y-o-y

In the second half of 2017, capacity utilization in manufacturing exceeded its 15-year average, with the

indicators of activity in the services sector remaining on a steadily upward trend, supported by favorable tourism

prospects, boding well for an expansion in business investment in 2018

New capital formation will also be supported by a pick-up in public investment activity, following a weaker-than-

expected contribution in FY:2017, when PIP payments were 0.5% of GDP lower than the respective Budget 2018 target,

mainly due to the delayed disbursement of EU funding. Accelerating inflows of FDI recorded during 2017 are

expected to remain supportive of domestic investment spending during 2018

55

60

65

70

75

-50

-40

-30

-20

-10

0

10

20

30

Q2:

2010

Q1:

2011

Q4:

2011

Q3:

2012

Q2:

2013

Q1:

2014

Q4:

2014

Q3:

2015

Q2:

2016

Q1:

2017

Q4:

2017

%index

Services confidence and capacity utilization

Services confidence (left axis)

Capacity utilization (right axis)

0

100

200

300

400

500

600

700

800

900

Aug

-14

Dec

-14

Apr

-15

Aug

-15

Dec

-15

Apr

-16

Aug

-16

Dec

-16

Apr

-17

Aug

-17

Dec

-17

mn eur

Inflows of foreign direct investment

+ €3.6 bn in FY:2017

Foreign direct investment liabilities

NATIONAL BANK OF GREECE | Greece: Macro Flash

GREECE | NBG Macro Flash |March 2018| p. 9

The current account balance recorded a deficit of 0.8% of GDP in FY:2017, slightly less than FY:2016 (-1.1% of GDP). The significant

expansion of the surplus in the services balance (1.0% of GDP higher than in FY:2016), which was supported by the increase in tourism revenue (0.6% of GDP higher than in FY:2016) and in the

transportation surplus (0.4% of GDP higher than in FY:2016) offset a larger deficit in the non-oil trade balance (0.3% of GDP

higher than in FY:2016) and in the oil balance (0.5% of GDP higher than in FY:2016)

The improvement in the Greek labor market continues unabated, gathering pace in July-November 2017 (increase in employment of 2.5% y-o-y during this period from 1.9%

y-o-y in H1:2017) and the unemployment rate declined further to 20.9% in July-November 2017 – its lowest level

since 2011. A stabilization in wages and a pick-up in working hours provide some nascent signs of

improvement in job quality

Inflation returned to negative territory in January 2018 (-0.2% y-o-y) – following an increase of 1.1% y-o-y in 2017 – mainly due to a stabilization in oil prices and a subdued increase in

core inflation (0.3% y-o-y in January 2018) that reflects sustainable cost containment by Greek firms, along with the deflationary impact of the euro appreciation on import costs

Following a cumulative increase of €5.9bn in 2017 – with household deposits increasing by €3.7bn and corporate

deposits by €2.2bn – private sector deposits decreased by €1.5bn in January 2018, reflecting an expected partial

reversal of a seasonal boost to household deposits from payments related to social transfers by the Greek State

(namely the social dividend and refund of the higher-than-justified healthcare contributions on pensions)

Current Account -1,1 -0,8 -1,2

Non-oil Trade Balance -7,9 -8,2 -8,7

Non-oil Exports 10,5 11,3 11,7

Non-oil Imports 18,4 19,5 20,4

Oil Balance -1,6 -2,1 -2,4

Services Balance 8,8 9,8 10,2

Primary Income Balance 0,0 0,1 0,1

Secondary Income Balance -0,3 -0,3 -0,3

Capital account 0,6 0,5 0,5

Source: Bank of Greece & NBG estimates

2016 2018f2017

Balance of Payments (as % GDP)

0

5

10

15

20

25

-10

-5

0

5

10

Jun

-11

Jan

-12

Au

g-1

2

Mar

-13

Oct

-13

May

-14

Dec

-14

Jul-

15

Feb

-16

Sep

-16

Ap

r-17

No

v-17

Employment growth Unemployment rate

Employment growth (left axis)

Unemployment rate (right axis)

%y-o-y

-3

-2

-1

0

1

2

3

-3

-2

-1

0

1

2

3

Sep-

13

Jan-

14

May

-14

Sep-

14

Jan-

15

May

-15

Sep-

15

Jan-

16

May

-16

Sep-

16

Jan-

17

May

-17

Sep-

17

Jan-

18

pps

Headline & core inflation

Contribution of fuel in CPI (in pps, left axis)

CPI inflation (y-o-y change, right axis)

Core inflation (y-o-y change, right axis)

y-o-y

-2

-1

0

1

2

3

4

Oct

-16

Nov

-16

Dec

-16

Jan-

17Fe

b-17

Mar

-17

Apr

-17

May

-17

Jun-

17Ju

l-17

Aug-

17Se

p-17

Oct

-17

Nov

-17

Dec

-17

Jan-

18

Χιλι

άδες

Private sector deposits

Non-financial & insurance corporations

Households

Private sector

monthly flows in billions

The tourism sector overperformed optimistic estimates, with revenue increasing by +11.1% y-o-y in FY:2017 (0.8% of GDP

or €1.4bn higher than in 2016), exceeding arrivals growth (+9.7% y-o-y in 2017) for the first time since 2013, while available data for early bookings for 2018 show that the favorable momentum is maintained, with demand from

major markets showing a double digit increase

Non-oil exports and imports (nominal terms, balance of payments data) increased by 9.6% y-o-y and 8.1% y-o-y,

respectively, in FY:2017, reconfirming the high elasticity of import demand to GDP trends and a high import content of Greece’s goods exports and industrial supplies, along with a

resilient export recovery

-30

-20

-10

0

10

20

30

40

-600

-400

-200

0

200

400

600

800

Dec

-13

Ap

r-14

Au

g-14

Dec

-14

Ap

r-15

Au

g-15

Dec

-15

Ap

r-16

Au

g-16

Dec

-16

Ap

r-17

Au

g-17

Dec

-17

Travel receipts

Travel receipts, change in level (in mn, left axis)

Travel receipts (y-o-y change, right axis)

millions

y-o-y

-15

-10

-5

0

5

10

15

-15

-10

-5

0

5

10

15

Dec

-13

Mar

-14

Jun

-14

Sep

-14

Dec

-14

Mar

-15

Jun

-15

Sep

-15

Dec

-15

Mar

-16

Jun

-16

Sep

-16

Dec

-16

Mar

-17

Jun

-17

Sep

-17

Dec

-17

Goods trade (excluding oil and ships)

Exports (y-o-y, 12m m.a.)

Imports (y-o-y, 12m m.a.)

y-o-y

NATIONAL BANK OF GREECE | Greece: Macro Flash

GREECE | NBG Macro Flash |March 2018| p. 10

In January 2018, the annual pace of decline in credit to the private sector remained the same as in December 2017 (-0.8%

y-o-y), however, significantly slower compared with -1.3% y-o-y in June 2017 and -1.5% y-o-y in December 2016, on the

back of an increase in corporate lending (0.6% y-o-y in January 2018 vs. 0.4% y-o-y in December 2017), while credit to households continues to contract (-2.3% y-o-y in January

2018)

The Greek banking system’s financing from the Eurosystem decreased further to €33.7bn in December 2017, from €66.6bn

in December 2016, with ELA declining by €22.1bn since December 2016 (-€65.2bn since June 2015) to €21.6bn, partly reflecting improving market access, and a pick-up in deposits

The official sector (including SMP/ANFA holdings) holds about 80% of Greek debt or €246bn in February 2018. A pre-emptive

build-up of a cash buffer of, at least, €12bn before the 3rd programme completion in August 2018 appears attainable, following the issuance of a 7-year benchmark bond, of €3bn

on 8 February 2018 and the continuing fiscal overperformance that led to a cash surplus in the primary

budget of General Government of €5.9bn in FY:2017. Moreover, Greece is expected to receive €1.9bn for this purpose, following the successful completion of the 3rd

review of the programme, while a further €8.3bn is expected to be made available upon the completion of the last review

in April-August 2018

The General Government debt-to-GDP ratio is estimated to peak at 181.1% at end-2017 and follow a downward trend

from 2018 onwards, declining to 165% by 2020, to 113.5% by 2040 and to 96.4% of GDP in 2060, according to the baseline

scenario A of the latest DSA analysis by the ESM. Gross financing needs are projected to reach levels slightly above the sustainability thresholds of 15% and 20% of GDP, respectively, in the medium and longer term. The Eurogroup meeting of 22

January 2018 confirmed the beginning of technical work on the creation of a contingent growth-adjustment mechanism,

which will relate to the provision of future debt relief on Greece’s future economic performance, and could be put in

place following the successful completion of the 3rd programme

The successful implementation by the ESM of the “short-term” package of measures to reduce Greece’s public debt servicing costs

contributed to a further smoothening of the long-term debt redemption profile and a sustainable lowering of interest costs. The prospective benefit from the full implementation of the above short-term debt relief measures on Greece’s gross public debt is

estimated at 25 pps of GDP by 2060. In this context, the implementation of the short-term measures also contributed to an increase in the share of Greek debt at a fixed rate of 48.1% of total debt in December 2017 from 30% in December 2016

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

Jan-

13M

ay-1

3Se

p-13

Jan-

14M

ay-1

4Se

p-14

Jan-

15M

ay-1

5Se

p-15

Jan-

16M

ay-1

6Se

p-16

Jan-

17M

ay-1

7Se

p-17

Jan-

18

Bank credit to private sector

Total private sector

Non-financial corporations

Households

y-o-y

0

5

10

15

20

25

30

35

40

0

20

40

60

80

100

120

140

160

180

Jun-

11

Dec

-11

Jun-

12

Dec

-12

Jun-

13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

Dec

-15

Jun-

16

Dec

-16

Jun-

17

Dec

-17

Greek banks' borrowing from the Eurosystem

ELA (left axis)

ECB (left axis)

Eurosystem funding (% of total assets, right axis)

capital controls

bn% of total assets

T-bills: 4,7%ANFA&SMP:

4,1%

Other bonds: 12,8%

Other loans: 4,6%

GLF:16,7%

IMF: 3,5% EFSF:

41,4%

ESM: 12,1%

Structure of Greek debt holders as of February 2018

0

5

10

15

20

25

30

35

40

80

120

160

200

240

280

320

360

400

2016

2017

2018

2019

2020

2030

2040

2050

2060

% GDP% GDP

Greece: Sovereign debt & financing needs

Debt-to-GDP ratio - Scenario A (left axis)

Debt-to-GDP ratio - Scenario B (left axis)

GFN-to-GDP ratio - Scenario A (right axis)

GFN-to-GDP ratio - Scenario B (right axis)

Source: ESM, DSA Analysis, January 2018

0

5

10

15

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

2044

2045

2046

2047

2048

2049

2050

2051

2052

2053

2054

2055

2056

2057

2058

2059

euro bn

Hellenic Republic debt amortization profile as of February 2018 (including the impact of the impementation by the ESM of the

"short-term debt measures" package and the Swap on PSI bonds in November 2017)

ANFA&SMP Other bonds IMF GLF EFSF&ESM Other loans Total Debt amort. (end-2016)

NATIONAL BANK OF GREECE | Greece: Macro Flash

GREECE | NBG Macro Flash |March 2018| p. 11

Greek Government bond yields declined in January 2018 to the lowest level since 2006, reflecting a boost in confidence

from the successful swap of the Greek PSI bonds and a timely completion of the 3rd review of the economic adjustment

programme. However, the assessment of Greek risk remains very sensitive to the increase in volatility in international

financial markets since mid-February 2018

The credible improvement in Greece’s fiscal position, in conjunction with the still supportive financial and monetary environment in the euro area, suggest that there is further scope for improvement in the relative valuation of Greek

sovereign debt. A sustainable recovery of economic activity and a credible operational specification of the “growth-adjustment” mechanism for debt-servicing would be the catalysts for a further improvement in Greece’s access to

market financing

Moody’s upgraded Greece's sovereign bond rating by two notches, to “B3” on February 21, 2018, while S&P and Fitch upgraded Greece by one notch to “B” on January 19 and February 16, respectively. These ratings are now 5 notches below investment grade for S&P and Fitch, and 6 notches below for Moody’s. All three agencies maintained a positive outlook. The key drivers for the rating decisions were economic and fiscal improvements, alongside improving prospects of further official debt relief.

In January 2018, the Greek State budget recorded a primary surplus of €1.9bn or 1.0% of GDP, 0.6% of GDP higher than the respective target of the 2018 Budget. Total tax revenue exceeded the respective target by €0.2bn (0.1% of GDP), mainly due to higher-than-budgeted revenue from the settlement of tax arrears from previous years, while lower primary expenditure contributed another 0.1% of GDP to the primary surplus.

Moreover, the surplus in the PIP balance was 0.3% of GDP above target, due to accelerating revenue from the EU that exceeded the respective payments by €0.5bn.

Government arrears, including tax refund arrears, decreased by €1.6bn in 2017 (to €3.3bn, the lowest level since the statistical recording of this data), which is €0.6bn greater than the funds disbursed by the ESM for this purpose.

1

2

3

4

5

6

1

2

3

4

5

6

30/

10/2

017

8/1

1/20

17

17/

11/2

017

26/

11/2

017

5/1

2/20

17

14/

12/2

017

23/

12/2

017

1/1

/201

8

10/

1/20

18

19/

1/20

18

28/

1/20

18

6/2

/201

8

15/

2/20

18

24/

2/20

18

5/3

/201

8

Greek Government bond yields

6m T-bill2yr Greek Gov.bond5yr Greek Gov.bond10yr Greek Gov. bond7yr Greek Gov.bond

%

PT

IE

ΙΤ SI

GR: Mar-18

NLBE DE

FR

FI

ES AT

SK

US

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

5,0

5 7 9 11 13 15 17 19 21

yield, %

10y gov. bond yields & sovereign ratings in the Euroarea & the US

Rating scale: from 0 (default) to 21 (highest quality - AAA)

Rating scale

●GR: Jan-18

0

3

6

9

12

15

0

3

6

9

12

15

Au

g-10

Feb

-11

Au

g-11

Feb

-12

Au

g-12

Feb

-13

Au

g-13

Feb

-14

Au

g-14

Feb

-15

Au

g-15

Feb

-16

Au

g-16

Feb

-17

Au

g-17

Feb

-18

Greece's Sovereign Ratings

Fitch Moody's S&P

index value:21 corresponds to AAA rating and 0 to selective default status

B Β3 BLatest Outlook positive positivepositive

20

22

24

26

28

30

20

22

24

26

28

30

Jan

-12

Jul-

12

Jan

-13

Jul-

13

Jan

-14

Jul-

14

Jan

-15

Jul-

15

Jan

-16

Jul-

16

Jan

-17

Jul-

17

Jan

-18

Government net revenue and primary expenditure

Gov. Net Revenue

Gov. Primary Expenditure

% GDP, 12m m.a.

NATIONAL BANK OF GREECE | Greece: Macro Flash

GREECE | NBG Macro Flash |March 2018| p. 12

Greece: Dates to Watch

2018

March

1-2 5 8 12 13 19 21 22-23

Euro Working Group

meeting

EL.STAT. release:

Quarterly National Accounts (Q4:2017)

ECB Governing

Council: monetary

policy meeting

Eurogroup meeting

ECOFIN meeting

€137mn IMF

repayment due

ECB Governing

Council: non-monetary

policy meeting

European Council meeting

April

11 20-22 23 26

ECB Governing Council: non-monetary policy

meeting

IMF Spring Meeting & World Bank meetings

EL.STAT. release: General government

deficit and debt 2017 – 1st notification

ECB Governing Council: monetary policy meeting

May

2 4 16 24 25

ECB Governing Council: non-monetary policy meeting

Completion of GR-stress tests

ECB Governing Council: non-monetary policy meeting

Eurogroup meeting

ECOFIN meeting

June

early 4 14 21 22 27 28-29 late

First submission of the 2018

EU-wide stress test’s

results to EBA by EU

banks

EL.STAT. release:

Quarterly National Accounts

(Q1:2018) / €148mn IMF

repayment due

ECB Governing

Council: monetary

policy meeting

Eurogroup meeting

ECOFIN meeting

ECB Governing

Council: non-

monetary policy

meeting

European Council meeting

Completion of 4th

Review

NATIONAL BANK OF GREECE | Greece: Macro Flash

GREECE | NBG Macro Flash |March 2018| p. 13

2018f

Q1 Q2 Q3 Q4year

aver.Q1 Q2 Q3 Q4

year

aver.Q1 Q2 Q3 Q4

year

aver.

GDP 0,0 0,4 -2,4 0,5 -0,3 -0,4 -0,9 1,2 -0,9 -0,3 0,4 1,5 1,4 1,9 1,3 Q4:17 1,9 2,0

Domestic demand 1,2 -1,4 -4,4 0,5 -1,1 -0,6 1,7 2,5 -0,6 0,7 2,4 0,3 2,1 1,9 1,6 Q4:17 1,9 2,0

Final Consumption 0,5 0,9 -2,1 0,1 -0,2 -1,3 -1,8 2,2 -0,5 -0,4 0,4 0,4 -0,9 -0,3 -0,1 Q4:17 -0,3 0,7

Gross fixed capital formation 5,8 -9,2 -1,8 4,0 -0,3 -9,9 13,3 14,7 -9,0 1,5 16,5 1,8 -6,5 28,9 9,7 Q4:17 28,9 10,8

Exports of goods and services 12,8 11,7 -8,1 -3,6 2,9 -9,5 -10,3 9,2 4,9 -1,9 5,2 9,7 7,6 5,3 6,9 Q4:17 5,3 6,3

Imports of goods and services 15,8 4,6 -14,2 -3,4 0,4 -9,5 -1,9 14,0 5,2 1,3 11,1 4,8 9,5 4,9 7,5 Q4:17 4,9 6,1

Retail sales volume (y-o-y) 0,0 0,6 -4,2 -2,1 -1,5 -3,3 -4,0 3,1 1,7 -0,6 2,8 2,1 0,9 -0,4 1,3 Dec 1,8 …

Retail confidence (15-yr. average: -2,8) -3,0 -1,3 -25,6 -11,1 -10,3 0,9 5,1 10,8 10,5 6,8 5,8 0,4 -1,6 1,3 1,5 Feb 2,8 …

Car registrations (y-o-y) 19,2 33,2 -2,2 2,1 13,8 -0,3 19,5 16,8 4,0 10,7 37,8 3,4 35,8 … … Nov 18,9 …

Consumer confidence (15-yr. average: -51,3) -37,0 -43,6 -60,6 -61,6 -50,7 -67,5 -71,2 -68,4 -65,0 -68,0 -71,8 -70,2 -57,4 -52,7 -63,0 Feb -53,0 …

Industrial production (y-o-y) 3,0 -2,5 1,4 2,5 1,0 -1,0 5,1 2,0 3,8 2,5 9,4 2,9 3,5 1,0 4,1 Dec 0,2 …

Manufacturing production (y-o-y) 6,7 -0,6 -0,5 2,1 1,8 1,2 7,8 5,3 2,2 4,2 6,0 2,7 2,3 2,6 3,3 Dec 6,3 …

Capacity Utilization (15-yr. average: 70,7) 67,1 67,0 62,0 65,2 65,3 65,9 66,4 67,5 69,6 67,4 68,2 68,7 71,1 70,1 69,5 Dec 70,5 …

Industrial confidence (15-yr. average: -9,2) -9,1 -14,0 -26,6 -16,6 -16,6 -9,4 -9,5 -6,2 -6,1 -7,8 -5,6 -7,8 -2,4 -2,8 -4,6 Feb 4,2 …

PMI Manufacturing (base=50) 48,5 47,1 37,5 48,5 45,4 49,1 49,5 49,4 48,7 49,2 47,0 49,4 51,8 52,5 50,2 Feb 56,1 …

Construction permits (y-o-y) 29,2 -5,6 -22,4 5,9 -0,3 -11,9 -30,9 38,1 -9,5 -7,0 16,7 32,0 5,7 … … Nov 24,4 …

Construction confidence (15-yr. average: -34,1) -33,9 -44,8 -60,9 -48,5 -47,0 -37,1 -41,6 -55,9 -55,0 -47,4 -51,6 -58,8 -41,9 -54,1 -51,6 Feb -45,1 …

PIP Disbursements (y-o-y) -40,9 -57,6 -21,0 43,9 -2,8 7,0 18,0 35,8 -14,9 -1,8 -36,9 -24,9 -37,0 15,7 -5,4 Jan 207,4 …

Stock of finished goods (15-yr. average: 12,6) 13,0 15,0 17,4 15,3 15,2 12,5 11,1 14,9 12,2 12,7 10,7 11,8 12,7 10,3 11,4 Feb 4,2 …

Current account balance (% of GDP) -1,9 -0,4 3,1 -1,0 -0,2 -1,5 -0,3 2,2 -1,4 -1,1 -1,6 -0,2 2,6 -1,6 -0,8 Dec -0,8 -1,2

Current account balance (EUR mn) -3295 -750 5482 -1841 -404 -2560 -608 3822 -2526 -1872 -2783 -427 4575 -2820 -1454 Dec -1241 …

Services balance, net (EUR mn) 1297 4757 9062 1816 16932 716 3776 8641 2179 15311 1006 4212 9864 2306 17388 Dec 449 …

Primary Income Balance, net (EUR mn) 477 -575 -185 699 416 759 -184 -636 57 -3 951 -233 -450 -177 91 Dec -111 …

Merchandise exports-- non-oil (y-o-y cum.) 10,0 7,5 4,2 1,9 1,9 -1,1 -2,5 0,1 1,4 1,4 8,5 9,5 8,7 9,6 9,6 Dec 9,6 …

Merchandise imports-- non-oil (y-o-y cum.) 4,6 -1,6 -7,4 -7,8 -7,8 -3,3 -2,8 3,8 3,2 3,2 7,2 6,4 6,6 8,1 8,1 Dec 8,1 …

Gross tourism revenue (y-o-y) 10,5 9,6 4,7 -4,4 5,2 3,8 -10,7 -7,9 7,5 -6,8 -4,9 10,1 12,6 11,1 11,1 Dec 0,8 …

International tourist arrivals (y-o-y) 45,6 15,0 2,6 -2,1 7,1 -6,2 -0,2 6,5 15,9 5,1 -1,8 9,0 12,2 5,9 9,7 Dec -0,3 …

Unemployment rate 25,7 25,1 24,8 24,3 25,0 24,0 23,6 23,3 23,3 23,6 22,6 21,6 20,9 … … Nov 20,9 19,8

Employment growth (y-o-y) 0,9 2,0 2,1 2,8 2,0 3,1 2,4 2,0 0,6 2,0 1,4 2,4 2,4 … … Nov 2,6 1,8

Headline inflation -2,4 -2,1 -1,8 -0,6 -1,7 -0,9 -0,9 -1,0 -0,4 -0,8 1,4 1,3 1,0 0,8 1,1 Jan -0,2 0,6

Core inflation -0,7 -0,9 -0,5 0,3 -0,5 0,2 0,3 -0,3 -0,7 -0,1 -0,4 0,2 0,4 0,4 0,2 Jan 0,3 0,9

Producer prices excl.energy -0,1 0,2 0,2 -0,2 0,0 -0,6 -0,8 -0,9 -0,6 -0,7 0,4 0,3 0,6 … … Nov 0,4 …

Gov. balance as % of GDP (Programme definition, according

to Budget 2018 )… … … … -3,0 … … … … 0,5 … … … … -0,8 … … 0,2

Government debt as % of GDP (Programme definition,

according to EU Commission, Compliance Report, January 2018 )… … … … 176,8 … … … … 180,8 … … … … 181,1 … … 179,9

Revenues--Ordinary budget (cum. % change) -1,8 -5,7 -6,7 -0,8 -0,8 4,3 6,9 9,7 7,6 7,6 0,4 -1,1 0,4 -0,2 -0,2 Jan 3,3 …

Expenditure--Ordinary budget (cum. % change) -2,2 -6,7 -5,3 0,2 0,2 -2,3 2,7 1,5 0,7 0,7 -0,8 -3,2 -4,7 -1,9 -1,9 Jan -6,3 …

Deposits of domestic private sector -15,1 -26,0 -26,6 -23,5 -23,5 -12,0 0,5 1,6 3,4 3,4 3,1 3,4 4,6 4,7 4,7 Jan 4,9 …

Loans to private sector (incl. sec. & bond loans) -2,5 -1,7 -1,5 -2,0 -2,0 -2,1 -2,0 -1,6 -1,5 -1,5 -1,3 -1,3 -0,8 -0,8 -0,8 Jan -0,8 …

Mortgage loans (including securitized loans) -3,3 -3,4 -3,5 -3,5 -3,5 -3,4 -3,4 -3,4 -3,5 -3,5 -3,3 -3,2 -2,9 -3,0 -3,0 Jan -3,0 …

Consumer credit (including securitized loans) -2,5 -2,3 -2,8 -2,3 -2,3 -1,7 -1,5 -0,7 -0,8 -0,8 -0,7 -0,7 -0,5 -0,5 -0,5 Jan -0,6 …

10-year government bond yield 10,0 11,6 10,8 7,9 10,1 9,5 8,2 8,2 7,5 8,3 7,2 6,1 5,5 5,1 6,0 Feb 4,2 …

Spread between 10 year and bunds (bps) 967 1112 1011 730 955 919 805 823 733 820 689 577 502 469 559 Feb 345 …

USD/euro 1,13 1,11 1,11 1,10 1,11 1,1 1,13 1,12 1,08 1,11 1,07 1,1 1,18 1,18 1,13 Feb 1,23 …

Sources: BoG, NSSG, MoF, ASE, Bloomberg and NBG estimates unless otherwise indicated

Fiscal policy

Monetary sector (y-o-y, end of period)

Interest rates (period average)

Exchange rates (period average)

Most recent

Real economy (y-o-y period average, constant prices)

Coincident and leading indicators (period average)

External sector (period average)

Employment

Prices (y-o-y period average)

Greek Economy: Selected Indicators

2015 2016 2017

NATIONAL BANK OF GREECE | Greece: Macro Flash

GREECE | NBG Macro Flash |March 2018| p. 14

NATIONAL BANK OF GREECE

Editor: P. Mylonas, Deputy CEO, Head of Research, e-mail: pmylonas@nbg.gr Tel: (+30210) 3341521, FAX: (+30210) 3341702.

Main contributors to this issue (in alphabetical order): E. Alevizopoulou, E. Balikou, A. Gouveli, N. Magginas, G. Murphy, P.

Nikolitsa. This analysis is provided solely for the information of professional investors who are expected to make their own

investment decisions without undue reliance on its contents. Under no circumstances is it to be used or considered as an offer

to sell, or a solicitation of any offer to buy. Any data provided in this bulletin has been obtained from sources believed to be

reliable. Because of the possibility of error on the part of such sources, National Bank of Greece does not guarantee the

accuracy, timeliness or usefulness of any information. The National Bank of Greece and its affiliate companies accept no

liability for any direct or consequential loss arising from any use of this report.

Note: The analysis is based on data up to March 6, 2018, unless otherwise indicated

GREECE

Macro View March 2018