These days the Greek economy completes two years of operation in pandemic conditions. Two years with temporary as well as permanent changes in the way the economy, ie households, businesses and government, participate and trade in the markets. Due to the special features of the COVID-19 coronavirus disorder, the services sector, in the 9 months January-September 2021, suffered the greatest losses compared to pre-pandemic levels. On the contrary, sectors such as construction and industry have overcome the constraints posed by the health crisis, while to some extent benefiting from the new needs created by the pandemic. Figure 1 shows the change in gross value added, at constant prices, produced in the 10 centralized sectors of the economy in the first 9 months of 2021 (€ 118.9 billion), compared to that produced in the first 9 months of 2019 (€ 120.9 billion). The data of the national accounts of the 4th quarter 2021, together with the first estimate for the whole year 2021, are expected to be published by ELSTAT on March 4, 2022.
We observe that the gross added value in the sectors, 1st of arts, entertainment and leisure, repairs of household goods and other services, 2nd of agriculture, forestry and fisheries, 3rd of financial and insurance activities, 4th of real estate and real estate management trade, vehicle and motorcycle repairs, transportation and storage, accommodation and catering services are 19.9%, 10.4%, 10.2%, 10.2% and 5.9% lower than pre-pandemic levels . On the contrary, the gross added value in the sectors, 1st of construction, 2nd of industry, 3rd of information and communication, 4th of professional, scientific and technical activities, administrative and support activities and 5th of public administration and defense, compulsory social security, education activities related to human health and social welfare, exceeds by 23.5%, 11.8%, 10.4%, 6.3% and 1.6% in relation to pre-pandemic levels.
Special mention should be made of the manufacturing sector, an industry that produces internationally tradable goods and attracts high-quality people (eg engineers, chemists, agronomists, pharmacists). According to the latest data of ELSTAT, the manufacturing production index, despite the monthly decline recorded in December 2021 (-2.8% MoM), strengthened by 3.5% QoQ / 9.8% YoY in the 4th quarter of 2021 from 0 , 8% QoQ / 8.0% YoY in the 3rd quarter of 2021. This result is a positive sign for the real growth rate of the Greek economy in the 4th quarter of 2021. For the whole year 2021, the manufacturing output index increased sharply by 8.6% YoY, covered the relatively small losses it had in the first year of the pandemic (-1.4% YoY in 2020) and was at a higher level by 2.5% compared to its pre-pandemic trend.
In 5 of the 24 sectors that make up the general manufacturing sector, the level of production in 2021 was lower than the corresponding in 2019 (manufacturing of clothing -15.8%, leather and leather industry -25.1%, wood industry and of wood and cork products -9.9%), while in the remaining 19 it was higher. Analytically, the sectors stood out, 1st of the production of basic pharmaceutical products and pharmaceutical preparations (2021 vs 2019, + 28.4%), 2nd of the manufacture of computers, electronic and optical products (+ 25.7%), 3rd of the manufacture of electrical equipment (+ 17.7%), 4th in the manufacture of other transport equipment (+ 17.5%), 5th in the manufacture of metal products (+ 17.3%) and 6th in the production of other non-metallic mineral products (+ 12.1%) . The above results are interpreted to some extent by the emergencies created by the pandemic (eg pharmaceuticals and electronic equipment for teleworking). In addition, part of the increased demand came from abroad, with the latest publication of ELSTAT talking about an increase in exports of goods outside ships and petroleum products by 19.9% ​​in 2021 from 3.2% in 2020 (the corresponding imports increased by 20.5% YoY in 2021 from a decrease of 3.6% YoY in 2020, with this trade deficit widening on an annual basis by € 3.3 billion at current prices or 21.3% in 2020 from a contraction of € 2, 3 billion or 12.7% in 2019).
The expected pandemic normalization is expected to eliminate the temporary factors responsible to some extent for the high rate of production growth in manufacturing in 2021 (8.6% YoY, the highest recorded since available data, without undergoing strong base effects in 2020). Therefore, the growth rate of gross value added produced in the manufacturing sector is estimated to slow down in 2022. Ceteris paribus, this scenario is a scenario of adjustment to normalcy and not a negative disturbance. The main risk that is currently emerging stems from the energy crisis and the consequent increase in production costs. The construction industry faces the same risk. Together with the manufacturing sector, they recorded the best performance, in terms of gross value added, during the two years of the pandemic, with the corresponding confidence indicators being, at least temporarily, at multi-year highs.
Source: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
