FDI stood at 7.0% of GDP in 3Q20
FDI was down 23.6% y/y to US$ 302.6mn (7.0% of GDP) in 3Q20, according to Geostat’s preliminary figures. Notably, reinvestments accounted for 44.2% of total FDI in 3Q20. The financial sector was the largest FDI recipient at US$ 128.3mn (+20.4% y/y, 42.4% of total), followed by energy at US$ 37.1mn (-24.7% y/y, 12.3% of total), manufacturing at US$ 36.6mn (-27.2% y/y, 12.1% of total), mining at US$ 31.0mn (+117.2 y/y, 10.3% of total) and real estate at US$ 20.6mn (-44.1% y/y, 6.8% of total). UK topped the list of investors with US$ 117.7mn (38.9% of total), followed by Netherlands at US$ 79.3mn (26.2% of total), USA at US$ 24.2mn (8.0% of total) and Japan at US$ 15.6mn (5.2% of total). In 9M20, FDI stood at US$ 719mn, down 24.0% y/y (6.2% of GDP).
International reserves at US$ 3.8bn in November 2020
Gross international reserves increased by 12.8% y/y to US$ 3.8bn in November 2020 according to NBG. On a monthly basis, the reserves were down by 0.7% (-US$ 25.9mn). Changes in reserves were attributed to the disbursement of donor funds to the budget and FX sales totaling US$ 173.8mn by NBG in November 2020.
NBG kept its policy rate unchanged at 8.0%
At its meeting on 9 December 2020, NBG’s monetary policy committee decided to maintain its policy rate unchanged at 8.0%, keeping rate at this level for the third time since August 2020. Annual inflation has been at 3.8% in recent months. According to NBG, the inflation rate will hover close to the target level of 3% in 1H21, reflecting weak aggregate demand. The regulator also took into account the supply-side factors, such as the increase in production costs due to pandemic-related additional restrictions and uncertainties surrounding the prolonged pandemic and the global restrictions. Committee also stated that a tight policy stance may be necessary to last for longer period, due to inflation expectations and the dynamics of economic activity. The likelihood of rate increase is not also ruled out by the regulator. The next committee meeting is scheduled for 3 February 2021.
