FDI stood at 7.6% of GDP in 1Q19
FDI was down 6.3% y/y to US$ 281mn (7.6% of GDP) in 1Q19, according to Geostat’s preliminary figures. The major reasons behind this decrease were ownership transfer from nonresident to resident entities (deals in real estate and energy sector) and completion of BP gas pipeline. The gambling sector was the largest FDI recipient at circa US$ 133mn (47.3% of total), followed by financial sector at US$ 42.7mn (-61.5% y/y, 15.2% of total), transport at US$ 28.6mn (-56.8% y/y, 10.2% of total), hotels and restaurants at US$ 25.4mn (unchanged y/y, 9.0% of total) and manufacturing at US$ 21.0mn (-48.5% y/y, 7.5% of total). Ireland topped the list of investors with US$ 133.2mn (2759.7x higher y/y), followed by UK at US$ 42.4mn (-48.7% y/y), and USA at US$ 22.5mn (-4.7% y/y).
Trade deficit was down 14.5% y/y in May 2019
In May 2019, exports grew by 3.5% y/y to US$ 334.3mn, imports were down 7.3% y/y to US$ 751.5mn and the trade deficit decreased by 14.5% y/y to US$ 417.2mn, according to Geostat’s preliminary figures. In 5M19, trade deficit was down 13.4% to US$ 2.0bn as exports increased 14.2% y/y to US$ 1.5bn and imports were down 3.6% y/y to US$ 3.5bn. Detailed foreign trade statistics will be available on June 19, 2019.
Money transfers up 11.8% y/y in May 2019
In May 2019, money transfers increased by 11.8% y/y to US$ 145.8mn after growing 10.1% y/y in previous month, according to NBG. Money transfers were up from Italy (+28.4% y/y, 13.9% of total), Greece (+24.6% y/y, 11.4% of total), USA (+13.9% y/y, 11.0% of total) and Israel (+8.4% y/y, 9.4% of total). Meanwhile remittances continued falling from Russia (-5.8% y/y, 23.9% of total) and Turkey (-20.0% y/y, 5.3% of total) like in previous months. In 5M19, money transfers were up 8.3% y/y to US$ 662.4mn.
NBG keeps monetary policy rate unchanged at 6.5%
At its meeting on 12 June 2019, NBG’s monetary policy committee decided to keep its key rate unchanged at 6.50%. In May 2019, annual inflation was 4.7% caused by the increased excise tax on tobacco contributing 1.3ppts to overall inflation. Importantly, core inflation, which excludes food, energy and tobacco prices stood at 1.1% in May indicating that the increase in inflation is temporary. According to NBG’s current forecast, inflation expected to converge the 3% inflation target from the beginning of 2020 once one-off factors fade. Regulator signals the further monetary normalization process to continue slowly taking into account risks of rising inflation expectations despite weak demand side inflationary pressures. The next committee meeting is scheduled for 24 July 2019.
