Greece Macro Flash: NBG high frequency indicator of Greek GDP | July 2020 update

​Latest releases of conjunctural indicators for May-June weigh on high-frequency GDP estimates for Q2, but activity gains strength in July

NBG’s high frequency forecast of Greek GDP growth for Q2:2020 has been updated to include the most recent data that became available in late-June and July.

The latest releases of conjunctural indicators (May-June 2020) pointed to a somewhat larger-than-previously-estimated decline in activity by leading indicators and other high frequency data.

The revision mainly reflects: i) a weaker-than-initially-envisaged (on the basis of survey data) response of business turnover to the gradual easing of lockdown in May (a decline in the economy-wide turnover of -27.1% y-o-y from -32.2% y-o-y in April according to EL.STAT.); and ii) a new contraction of 93.4% y-o-y in arrivals at Athens International Airport in June – despite the partial lifting of restrictions on flights from specific EU countries in mid-June. With the bulk of the lifting of restrictions occurring in July, this month’s data will be more informative.

GDP in Q2:2020 is currently estimated to decline by c. 16% y-o-y compared with a previous estimate of -13.5% y-o-y, albeit the monthly rate of activity continues to improve rapidly, with the June rate at -7.7% y-o-y (versus a previous estimate of -4.5% for the same month and an estimated -17.3% y-o-y in May).

That being said, mobility trends related to retail and recreation gained additional traction in late June and in the first half of July, exceeding their starting level in February according to Google data. This development presages a further strengthening in domestic demand in July which bodes well for a low single digit contraction in GDP in July of ˂4%.

NBG Economic Analysis forecasts of Greek GDP growth based on high frequency indicators are updated on a regular basis and will be available on the NBG website