“Over the past 8 years, Greece has implemented a bolt economic reform and adjustment programme, that has fully eliminated fiscal and external deficits, improved competitiveness, restructured, consolidated and recapitalised the banking system”
contrast, private consumption remained flat, while imports of goods and services and public consumption contributed negatively to growth (-2.4 pp and -0.2 pp, respectively). At the same time a bundle of other hard and soft economic indicators point to growth acceleration in 2018, such as increased manufacturing employment and a decrease in unemployment statistics, soft data indicators such as improved manufacturing PMI and the economic sentiment indicator have reached multiyear peaks pointing to continuing economic expansion.
Banking executives in Athens point out that over the last few months there have been visible improvements in the financial sector, as for example yields of Greek government bonds (GGBs) which have declined to pre-crisis levels, while the Greek government has returned to international bond markets. In this context, they refer to, the five-year bond which was issued in July 2017, a swap of PSI bonds which took place towards the end of 2017 and a seven-year bond which was issued in February 2018
Although Fitch and Moody’s upgraded the Greek sovereign debt, GGBs are still five notches below investment grade while bond spreads increased recently. Most banking executives share the view that reduction of non-Performing Exposures (NPEs) and Non-Performing Loans (NPLs) remains prime concern, although some progress is now visible. According to latest Bank of Greece data at the end of December 2017, the stock of Non-Performing Exposures