Greece Business Forecast Report Q1 2008

Publication Date	November 2007
Publisher	Business Monitor
Product Type	Report
Pages	52
ISBN Number	1745-0551
Product Code	BMI00280

Buy this product or for assistance call +44 20 7060 7474

PDF £375.00$624 | €420

FAX Order above formats by FAX

Summary

Reform Process Remains Crucial In line with our view, the Greek economy is starting to show signs of slowing, as tighter monetary conditions impact upon consumption, and in particular, investment. Economic momentum decelerated to 4.1% year-on-year (y-o-y) in Q207 from 4.6% in the previous quarter, and we expect this trend to remain in place as economic expansion continues to cool throughout our five-year forecast period. Nonetheless, we expect growth to remain above the eurozone average as ongoing structural reforms, an improving external position and robust consumption (even in the face of tighter monetary conditions) ensures average economic expansion stays above 3.0% throughout the medium term.

The re-election of the New Democracy (ND) party in the September 16 election is a positive step for the continuation of economic reforms. However, we anticipate that the ND will face a tougher second term due to a reduction in its parliamentary majority, down to as little as two seats, and the more challenging nature of reforms that the government will need to pass in its second term to ensure the Greek economy is able to compete against its EU partners. If the government prioritises securing greater popularity over its reformist agenda, the long-term prospects of the Greek economy will suffer a sharp downturn.

Greece's widening current account deficit is likely to peak around a record 14.0% of GDP in 2007, before beginning to narrow towards 8.5% by the end of our five-year forecast period. This trend reversal will be led by an improvement in the country's trade shortfall, which should narrow going forward as ongoing structural reforms continue to improve export competitiveness and capital imports decline as investment growth moderates. However, persistently high oil prices and a potential inability or unwillingness from the government to push through much needed structural reforms pose severe risks to our forecast.

The Greek pension system is in dire need of root and branch reform. Merging pension funds is vital, as is an end to contributions below mandated levels by all sides and reforms to entitlements.

Any government attempts to negotiate or impose such a settlement will likely result in large-scale protests and a fractious political scene. Courage is required, or the already rickety pension system will be in truly bad shape in 10 years, and could well collapse.

Content

Executive Summary
Reform Process Remains Crucial
Chapter 1: Political Outlook
SWOT Analysis
BMI Political Risk Ratings
The re-election of the New Democracy (ND) party in the September 16 election is a positive step for the continuation
of economic reforms.
Domestic Politics
New Democracy Promise Continuation Of Reform Agenda
Chapter 2: Economic Outlook
SWOT Analysis
BMI Economic Risk Ratings
Economic Activity
Government Reforms Remain Key To Long-Term Success
Despite slowing over our five-year forecast period, economic activity will remain buoyant over the medium term.
Labour Market
Pension System Crisis Must be Averted
The Greek pension system is in dire need of root and branch reform. Merging pension funds is vital, as is an end
to contributions below mandated levels by all sides and reforms to entitlements.
Balance Of Payments
Current Account: Still On Shaky Ground
We expect the European Central Bank to leave interest rates unchanged for the remainder of the year, forecasting
a cumulative 50bps hikes in 2008, as inflationary pressures in the eurozone will remain the key concern.
Monetary Policy
Inflation To Dominate ECB Agenda
ECB Tightening To Ease Inflation
Monetary tightening by the European Central Bank in the medium term will aid the disinflationary process in
Greece.
Chapter 3: Special report
Negative Oil Price Shock Scenario
Chapter 4: Business Environment
SWOT Analysis
BMI Business Environment Risk Ratings
Legal Framework
Labour Force
Foreign Trade Regime
Business Monitor International Ltd
greece Q1 2008
Tax Regime
Chapter 5: Key Sectors
Tourism
Executive Summary
Confirming BMI's estimate of a turnaround in the performance of the Greek tourism industry in terms of
foreign tourist arrivals in 2005, the Institute of Tourism Research and Forecasts (ITEP) indicated that
arrivals increased nearly 4% y-o-y to some 15mn.
Construction growth will continue to decline as the Olympic building boom subsides, especially since
the EU development funds that previously financed a large portion of public infrastructure are increasingly
likely to be diverted to newer, poorer member sBMI expects construction's share of total GDP to fall to
6.28% by 2011.
Infrastructure
Executive Summary
List of Tables
- Table: Cabinet List
- Table: Economic Activity
- Table: Top 10 Energy Producers, Consumers And Importers
- Table: % Point Changes To Base Forecasts From A Downward Oil Price Adjustment Scenario
- Table: Emerging Europe Annual FDI Inflows
- Table: Greece Annual FDI Inflows
- Table: Top Export Destinations
- Table: Value of Exports by Category
- Table: Greece Tourism Industry - Historical Data And Forecasts
- Table: Greece's Construction Industry - Historical Data And Forecasts

Delivery Details

PDF:Immediate delivery

Ask a question about this product

Need help finding the right product?

Product features / use

Scope	Expert Insight/Opinion
Level	General Industry Strategies
Data	Detailed Market Forecasts
Profiles	Profiles of Key Companies
Features	Contains SWOT Analysis
Extra Info	Consumer Trends Highlighted