Mixed signals are emerging from the Greek economy amid geopolitical uncertainty in the Middle East. According to Eurobank Research’s weekly ‘7 Days Economy’ bulletin, ‘soft’ indicators show resilience against energy shocks: the economic sentiment index rose to 107.4 points in Q2 — up from 106.7 in Q1 and well above the eurozone’s 94. Manufacturing PMI held steady at 53.2, remaining above the 50 expansion threshold for a 14th consecutive quarter.
Yet ‘hard’ data point to modest slowdown — down from 2% GDP growth in Q1. Employment rose just 0.4% in April–May, after 1.2% in the prior two months. Retail trade turned marginally negative in April, and industrial production fell 3.5% month-on-month — driven largely by an 18.4% drop in electricity supply. In contrast, exports of goods (+13.6%) and tourism receipts (+9.6%) kept the external sector strong.
The most worrying sign comes from consumer confidence, which plunged to −53.2 — its lowest level in 15 quarters and marking five consecutive quarters of deterioration. This occurred as May’s inflation hit 4.9%, though it eased to 3.9% in June following de-escalation in regional tensions and lower energy prices. The Bank of Greece forecasts 1.9% GDP growth and 3.8% inflation for 2024, noting that the U.S.–Iran interim agreement and cheaper oil open the door to a slightly more favorable scenario.
Fiscal Incentive for Dual-Use Infrastructure
A new government decision introduces Greece’s first tax incentive for defense-related dual-use investments — projects serving both civilian and strategic security purposes. A total of €150 million has been allocated for accelerated depreciation on investment plans in key sectors including defense, vehicle manufacturing, and aerospace. Notably, the measure carries no direct fiscal cost for 2026–2028; instead, it defers tax revenue losses to later years — with estimated foregone tax income stretching from 2029 through 2040. Still, it paves the way for investment in a sector now widely viewed internationally as both economically developmental and geopolitically critical.
Morgan Stanley’s View on DEH
Morgan Stanley has initiated coverage of Public Power Corporation (DEH) with a ‘hold’ recommendation, citing sustainable compound growth potential. Its first analysis concludes that DEH has moved beyond recovery into a phase of structural expansion — focused on generation, networks, and retail. Since 2019, EBITDA has surged from €300 million to €2 billion; renewable capacity has more than doubled; its regulated asset base has grown to €5.7 billion (projected to reach €7.3 billion by 2030); and its customer base now stands at 8.6 million. Backed by €22.2 billion in planned investments between 2026 and 2030, analysts forecast average annual growth of 22% in adjusted earnings per share through 2030.