Macro roundup: External gap
Greece's current account deficit narrowed only slightly last year from 2020
Greece’s current account deficit for 2021 came to 10.6 billion euros, which was a reduction of just 357 million euros compared with 2020.
Given how strongly tourism recovered last year relative to its collapse in 2020, it’s disappointing that the overall improvement in the current account deficit was a small one in nominal terms. That was due to the deterioration in the goods deficit — which came to 25.6 billion euros last year, compared with 18.5 billion euros in 2020.
That said, the strong rebound in real gross domestic product last year, combined with rising inflation — a major factor in the deterioration of the goods balance — means the current account shrunk more when measured as a proportion of output. Exactly how much, we will know next week when the national accounts data for the fourth quarter is release.
Bank credit expansion to the private sector slowed to an annual growth rate of 0.9 percent in January, compared with 1.4 percent in December. Monthly flows came to a net reduction in lending of 1.3 billion euros during the month.
Private sector deposits in the banking system fell 2.2 billion euros in January to 178 billion euros. However, there’s usually a seasonal dip in deposits in the first month of the year, with January 2021 being the only other month since the outbreak of the pandemic in which deposit totals retreated.
The European Commission’s economic sentiment indicator for Greece deteriorated slightly to 114 in February, from 114.2 the month before. However, consumer confidence picked up a bit.
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Next week’s key releases
Monday, Feb. 28:
December retail sales (Elstat)
November building activity (Elstat)
January producer price index (Elstat)
Tuesday, March 1:
February manufacturing PMI (IHS Markit)
Friday, March 4:
Fourth-quarter gross domestic product (Elstat)
Elsewhere on the web
John Psaropoulos reports for Al Jazeera on Greece’s naval modernisation.
Here’s a rather alarming report on the new trains for the Athens-Thessaloniki route. They didn’t work so well for the Swiss.
Greece’s project finance market is starting to recover, but it’s still dominated by local lenders for now.
Matthew Klein looks at Europe’s error in becoming even more reliant on Russian natural gas.
Zoltan Pozsar on how Russian sanctions may play out in funding markets.
I really liked this post from Duncan Weldon on the lasting impact that the current inflation spike could have in macro policy.
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