ECONOMY
Greek Banks Passed Stress Tests
Greece’s four systemic banks—National Bank of Greece, Piraeus Bank, Eurobank, and Alpha Bank—successfully passed the European Central Bank’s stress tests at the end of July, demonstrating their strong capital adequacy and capacity to execute business plans. These banks’ solid financial positions suggest that they are well-equipped to support major infrastructure projects in Greece. According to Axia Research, the strong capital buffers mean that there is no immediate need for capital infusion, even in the face of potential economic pressures over the next three years. This stability plays a crucial role in funding ongoing and future major infrastructure projects that are vital to Greece’s economic growth and development.
Fitch Rated Greek Banks Outlook Positive
Fitch Ratings released its report, “Greek and Cypriot Banks: Peer Review,” in early August, affirming a positive outlook on Greece’s four major banks. The report predicts that the impaired loan ratio of these banks will fall from 39% at the end of 2019 to 25% by mid-March 2021, with the potential to drop into the single digits by the end of 2022. This improvement is attributed to the asset protection scheme and recent capital enhancement actions. These positive developments in Greece’s banking sector will not only boost financial stability but also provide strong support for the country’s major infrastructure projects in Greece. With healthier capital positions, these banks will be well-positioned to finance and back critical infrastructure initiatives that are key to Greece’s long-term growth and modernization.
PROPERTY MARKET
Island Property Prices Keep Rallying
According to the latest analysis by the Holiday Home Price Observatory of Geoaxis Property & Valuation Services on five key Aegean islands, the average annual increase in sale prices in the second quarter of 2021 amounted to 5.2%, and nearly 7% compared to the second quarter of 2019. This clearly indicates that property prices continued to rise throughout the pandemic. Furthermore, the upward trend in property values is further supported by the ongoing major infrastructure projects in Greece, which are enhancing connectivity, boosting tourism, and improving the overall appeal of these islands. In addition, as Greece invests in modern infrastructure such as transportation networks and tourism facilities, these islands are becoming even more attractive to both local and international buyers.
Greek Real Estate Proved Immunity
The global credit rating agency DBRS Morningstar recently concluded that the Greek real estate market has restored its resilience since 2020, despite the overall economic impact of the pandemic. Moreover, this positive trend continued into 2021, as preliminary data from the Bank of Greece showed that property prices rose by 3.3% on an annual basis. This strong rebound in the real estate market is largely due to foreign investments. Furthermore, the most significant price increases were seen in Athens and Thessaloniki, where prices reached 7.6% and 4.8% in 2020, respectively, and 5.4% and 3.7% in the first quarter of 2021.
INVESTMENTS
Tourism Projects Never Cease
A sizable tourism project has received approval: the construction of a 5-star, 320-room hotel with a budget of €38 million in North Afandou on Rhodes Island. This project will be incorporated into the Greek government’s strategic investments program, which foresees fast-track procedures. At the same time, new 5- and 4-star hotel projects will also begin on Greek islands such as Mykonos, Lefkada, and Gytheio. These four tourism projects are expected to create substantial job opportunities and contribute to the local economies.
Piraeus Port Sold More Shares to Cosco
The court of Audit in Greece lately approved the Piraeus Port Authority (OLP) to sell its 16% stakes to Cosco Shipping Line. The sale of these additional shares will raise Cosco’s stake in OLP from its current 51% to 67%, solidifying China’s influence on the lucrative trans-Mediterranean maritime artery.
ENERGY
Greece Reached Historic High In RES Index
The auctions for a total renewable energy capacity of 2.1GW by 2025, along with the introduction of a new digitized licensing procedure for participation in national renewable energy projects, have significantly contributed to Greece’s rise in the biannual Renewable Energy Country Attractiveness Index. As a result, Greece climbed from 31st to a historic high of 26th in the index, which has been compiled by Ernst & Young since 2003. This improvement reflects the country’s growing commitment to renewable energy and its efforts to streamline processes for investors.
INFRASTRUCTURES
Freight Transport Vastly Upgrade
A budget of €4 billion has been allocated to launch next-generation railway projects that will connect Greece’s major ports to its railway network and establish the country as a hub for freight transport in Southeastern Europe.
Projects include the modernisation of the Larissa-Volos line and new railway connections in the region of Magnesia for linking its industrial zones to the port of Volos and Nea Anchialos airport. More enhancement plans are on progress.
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