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The Gree n k Shoots Of Recovery

k. The Gree n Shoots Of Recovery. The Gree n k Shoots Of Recovery. February 3 2014. Michael Massourakis Chief Economist Alpha Bank. Recovery Spells Confidence !. GDP Growth. Employment *. (% monthly change). * Seasonally adjusted. Source: ELSTAT.

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The Gree n k Shoots Of Recovery

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  1. k The GreenShoots Of Recovery The Green k Shoots Of Recovery February 3 2014 Michael Massourakis Chief Economist Alpha Bank

  2. Recovery Spells Confidence ! GDP Growth Employment * (% monthly change) * Seasonally adjusted Source: ELSTAT Source: Hellenic Statistical Authority, Alpha Bank Forecast External Tourism PMI Manufacturing Index mln people Source: Bank of Greece Source: Bank of Greece

  3. Twin Surpluses Ahead ! Current Account Balance % of GDP * General Government Primary Balance % of GDP * incl. capital transfers Source: Hellenic Statistical Authority, Alpha Bank Forecast Source: Hellenic Statistical Authority, Alpha Bank Forecast

  4. Sustainable Fiscal Consolidation ! General Government Budget (in €bn) Medium-Term Fiscal Adjustment (as % of GDP) Primary Balance -24.2 -10.9 -4.7 -2.4 0.0 Source: Second economic adjustment programme for Greece, Second Review, July 2013 Source: Second economic adjustment programme for Greece, Second Review, May 2013 General Government Central Government Balance in €bn Primary Balance -2.4 1.4 0.0 0.0 3.6 • Excluding one-off transfers of €2.0 bn in Eurosystem profits from GGBs • **Excluding one-off transfers of €2.7bn in 2013 and €2.6 bn in 2014revenue as officially budgeted (B2014) * Revenues excluding one-off transfers of €1.5 bn in Eurosystem profits from GGBs Source: Ministry of Finance Source: ELSTAT, Ministry of Finance

  5. Competitiveness Losses Recouped ! Competitiveness Labor cost per hour 2000=100 Improvement (-) vs 2009 (-2.6%) (-12.9%) (-9.3%) (-2.0%) (-21.8%) Source: European Commission, Price and cost competitiveness Source: Eurostat Tradablesvs Non-Tradables(CPI Inflation) CPI Inflation and Labor Costs Source: ELSTAT, Eurostat Source: Bank of Greece

  6. External Balance Restored ! 2007=100 External Balance (in € bn) Current Account Jan-Nov 2012 Jan-Nov 2013 -€ 2.31 bn+€ 2.97 bn** Oil Exports Non-Oil Exports Tourism Shipping Nov-13 * Net of EU transfers and Income Balance * *Excluding one-off transfers of €1.5 bn in Eurosystem profits from GGBs Source: Bank of Greece

  7. Structural Adjustment: A Star Is Born ! Major Projects Business Friendly Ranking Privatization Revenue Source: EC, The Second Economic Adjustment Programme for Greece, Second Review-May 2013, TAIPED (Hellenic Privatization Authority) Source: World Bank, WEF, IMD Adjustment Progress Source: EC, The Second Economic Adjustment Programme for Greece, Second Review-May 2013 Source: Berenberg Bank, The Lisbon Council. The Euro Plus Monitor Winter 2013 Update

  8. Recovery on the way ! Consumer Confidence Economic Sentiment * Q1 2014 economic sentiment: Jan.2014 * Q1 2014 economic sentiment: Jan.2014 Manufacturing Production (2005=100) Volume of Retail Sales (2005=100) Source: ELSTAT, Foundation for Economic and Industrial Research

  9. Is Unemployment Stabilizing? Yes ! Unemployment* Net Hirings Over Dismissals (Private Sector) In thousands 1,356 1,350 1,345 1,400 Youth Unemployment rate (25-29 years old) Unemployment rate Over 12 months Less than 12 months First time Unemployed 0 * Non seasonally adjusted Source: Manpower Employment Organization, Greece, ELSTAT Source: ELSTAT Unemployment New Employment Contracts Temporary Full-time Part-time * Seasonally adjusted Source: ELSTAT Source: Labour Inspectorate, Ministry of Labour

  10. Liquidity Constraint Eased ! Funding Gap Deposit Flight yoy % change In bps (In € bn) € 219 bn € 163bn € 70bn* * Nov.2013 Source: Bank of Greece, Bloomberg Source: Bank of Greece Household Deposit Flows Credit Flows To Non-Financial Corporations € millions € millions Source: Bank of Greece

  11. Banking Sector: Well Provisioned, Well Capitalized ! Credit Expansion – Deposit Growth Lending Rates – Deposit Rates yoy % change yoy % change * Business up to € 1mln ** Households up to 1 year Source: Bank of Greece, ECB Source: Bank of Greece, ECB Core Tier I Capital (as % of risk-weighted assets) NPL and Coverage Ratios (end of period) (end of period) Source: Bank of Greece, ECB Source: Bank of Greece, ECB

  12. Real Estate Blues . . . In thousands In €bn Investment in Construction (at current prices) Index 2007=100 In thousand units In €bn Source: ELSTAT, Bank of Greece Source: ELSTAT Real Estate Tax (as % of GDP) Taxes on financial and capital transactions Gift and inheritance taxes Recurrent taxes on net wealth Recurrent taxes on real estate property Before new real estate tax After new real estate tax Source: OECD, Budget 2014, Alpha Bank Estimates Source: ELSTAT, Bank of Greece

  13. Is There An Opportunity In Real Estate? Yes ! House Price Adjustment Foreign Inflows To Buy Real Estate Source: Bank of Greece Source: ELSTAT, Bank of Greece Residential Investment % of GDP Construction Activity Source: ELSTAT, Foundation for Economic and Industrial Research, ECB Source: ELSTAT, Bank of Greece

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