Macro roundup: Deposit growth stalls
Greek deposits dropped in consecutive months for first time since pandemic's outset
One of the economic stories of the pandemic has been the strong rise in private sector deposits as fiscal and monetary stimulus supported incomes and lockdowns damped consumption. That growth may now be levelling out.
Household and business deposits have fallen for two straight months, with a 260 million-euro decline in January following the 2.2 billion-euro the month before.
It would be premature to extrapolate too much from this — the first month of the year almost always sees a seasonal drop in deposits, and February’s drop isn’t that large. However, it’s the first time since the pandemic reached Greece that deposits have fallen in any month that isn’t January, and this does have the feel of another punctuation point marking the the transition between economic phases.
With inflation running high, forcing more Greeks to eat into savings, economic growth set to stall and monetary policy tightening, the run up in deposits looks unlikely to return at its previous pace this year.
Building activity in Greece, as measured by the number of permits issued, rose 26.6 percent in 2021. For the month of December, it increased 18.3 percent from a year earlier.
Greece’s manufacturing PMI dropped to 54.6 in March from 57.8 as the rise in new orders weakened, according to IHS Markit. A reading above 50 still indicates improving conditions, but last month’s reading was an 11-month low.
The European Commission’s economic sentiment indicator for Greece dipped to 113.2 from 114 in March. The drop-off in consumer confidence was sharper, falling to -46.6 from -39.5.
Retail sales increased 13.9 percent in January from a year earlier, with volume rising 8.9 percent.
March data for Greek inflation doesn't come out until next week, but the euro-area-wide release from Eurostat gives an estimate of 8 percent for Greece’s EU-harmonised rate.
From earlier this week, a post looking at old television adverts for Greek bonds and treasury bills. Looking back now it seems mad that this was once a thing, but they were different times.
Also, if you look very closely, you’ll seen an intraday chart for the deutschmark from a Bloomberg terminal in 1994:
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Next week’s key releases
Thursday, April 7:
February commercial transactions (Elstat)
Friday, April 8:
March consumer price index (Elstat)
February industrial production (Elstat)
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