Macro roundup: Tourist attraction

Revenue nears target; current account deficit narrows; unemployment continues to fall

Greek tourism had another relatively strong month in September, gathering three quarters of the revenue it received in the same month of 2019, a record year.

That’s put receipts for the first nine months of the year at 54.4 percent of their levels for the same period of 2019 (and more than three times higher than last year), according to balance of payments data released today. Higher receipts are coming from a smaller recovery in visitor numbers — 43 percent of 2019 levels for the year to date — as those tourists that have come have spent more.

The government has set a goal for tourism revenues to reach half of their 2019 level this year, i.e. a target of 9.1 billion euros. That goal will almost certainly be reached, with receipts in the first nine month’s falling just 332 million euros of that goal.

Overall, the current account deficit in September narrowed to 177 million euros from 446 million euros in the same month last year. For the first nine months of the year, Greece recorded a deficit of 5.6 billion euros — a 2.8 billion-euro decrease from 2020.

Taking the PEPP

Meanwhile, Jana Randow and Carolynn Look reported for Bloomberg earlier this week that the European Central Bank is using an informal operating ceiling of 50 percent of a country’s bonds for asset purchases. I took at the implications of this for purchases of Greek bonds.

PEPP talk
News this week shines light on how much scope there is for the European Central Bank to continue increasing its Greek government bond holdings. The central bank is operating using an informal ceiling of just under 50 percent of each country’s bonds, according to a…
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In other data:

  • In another sign of the strong rebound in economic activity, revenue for all Greek businesses was 6.9 percent higher in the third quarter than in the corresponding quarter of 2019. Compared with 2020, it increased 26.9 percent.

  • Unemployment also continued its rapid descent in September. The rate dropped to 13 percent from 13.9 percent in August. There were 3.6 percent more people employed than in September last year, and 4.2 percent more than in the same month of 2019.

  • The central government primary budget deficit for the first 10 months of the year was 7.2 billion euros, with the primary deficit for the month of October coming in at 1.24 billion euros after three months of surpluses. Last year’s deficit for the first 10 months was 9.1 billion euros.

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Next week’s key data

Tuesday, Nov. 23:
  • Third quarter residential property price index (Bank of Greece)

Thursday, Nov. 25:
  • January-October central government budget execution, final (Finance Ministry)

Friday, Nov. 26:
  • October bank lending and deposits (Bank of Greece)

Elsewhere on the web

  • The Finance Ministry submitted Greece’s 2022 budget to parliament today.

  • Adam Tooze argues that the energy-price spike has exposed the high risks in that Europe’s post-2014 investment in a market-based gas import model.

  • Maria Demertzis notes that countries hit hard by the financial crisis have been bouncing back from the pandemic quicker than their peers. This is certainly the case for Greece.

  • Marco Buti, a European Commission official who was around during the financial crisis and the pandemic, draws some lessons from Europe’s journey.

  • Zsolt Darvas and Catarina Martins of the Bruegel think tank summarise the issues around including home-ownership costs in the inflation indicator.

  • Alex Sakalis writes about Lord Guildford, the forgotten philhellene who founded Greece’s first university.

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