“Greece’s stock market is leading a rebound in European stocks so far in 2019,” Forbes writes in an article citing macroeconomic indicators.
For years, Greek equities were on a losing streak. They mirrored the Greek economy which , under the pressure of a mounting debt burden, was floundering in the swamp of its worst post war depression.
But the worst may be over, as evidenced by several macroeconomic indicators.
One of them is the rebound in the Greek GDP, up 1.6% year-on-year in the fourth quarter of 2018, following a 2.1% growth in the previous three-month period. Both figures are well above the average 0.90% from 1996 until 2018, well above the record low of -10.20% in the first quarter of 2011.
Greece’s GDP has rebounded thanks to a surge in exports, which reached an all-time high of 3144.50 EUR Million in October of 2018; and a surge in tourism revenues, which also reached an all-time high of 3601.30 EUR Million in August of 2018.
Greece’s exports and tourism have been helped by a big improvement in the country’s international competitive rankings, from 96 in 2013 to 57 in 2018.
And there’s a big fiscal turnaround. The Greek government registered a record budget surplus equal to 0.80% of the country’s GDP in 2017, compared to a record deficit of -15.10% of GDP in 2009.
Meanwhile, Greece is beginning to live within its means. It registered a Current Account deficit of 0.80% in 2017, compared deficit of -15.20% in 2007.
International credit rating agencies have taken notice, upgrading the country’s credit-worthiness in recent months.
That’s a transformative development for Greece’s ailing economy that has allowed the nation’s government to get back to debt markets once shunned.
In the wake of a strong rally thus far this year, the upgrading of the national economy by international credit rating agencies is a game changing for Greek equities.
While it’s unclear whether the recent rally is sustainable, one thing is clear: Greece will rise again — helped by democracy and human development, offering great opportunities for long-term investors. [full article Forbes]