“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”

Financial Mirror (Cyprus) - - FRONT PAGE -

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

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