| Los Angeles Times | - |
A painful but relatively peaceful year after Greece
was beset by grim headlines of political pandemonium and violent
protests, tourism experts and the government are expecting a surge in
vacationers, and with it a boost to Greece's struggling economy.
SOCGEN: Traders Are Talking About Greece Again, But In A Different Way Than They Have Been In Years
If you haven't seen it, then you should check out a chart
of Greek borrowing costs. You might do a double take. Quietly, demand
for Greek debt has jumped quite a bit, as the market feels that the
country may have turned the corner for real this time.
Here's a 6-month chart of yields on the Greek 10-year bond.
In SocGen's latest "On Our Minds" note, strategist Michala Marcusen
says that Greece is one of the top things that clients are asking about
right now.
Marcusen writes:
To us the biggest story is that Greece as a positive story is being talked about at all.
Here's a 6-month chart of yields on the Greek 10-year bond.
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Marcusen writes:
TOP CLIENT QUESTIONS WILL 2013 BE THE LAST YEAR OF GREEK RECESSION… …IS MORE DEBT RESTRUCTURING IN THE PIPELINE?
An upgrade by Fitch to B- from CCC on 14
May, praise from the EU Commission on continued progress and first hints
that the spill-over from Cyprus was not as bad as feared have built
hope that 2013 – as forecast by the EU Commission – could be the last
year of recession in Greece. Further boosting hopes, was the news that
early bookings show that 17 million tourists are expected to visit
Greece after 15.5 million last year, attracted by lower prices.
The next key data to watch is May PMI
(due 3 June). Although, still deep in contraction territory, the 21-
month high of 45 observed in April (up from 42.1 in March) has helped
underpin the more hopeful mood. The EU Commission and IMF forecast GDP
growth at -4.2% in 2013 and see the first year of positive GDP growth
since 2007 in 2014 at 0.6%. Our own forecasts, however, are considerably
more downbeat with growth forecast at -10.3% in 2013, -4.2% in 2014,
-0.6% in 2015 and only turn positive to +0.9% in 2016. On the short-term
dynamics, we note that the -5.3% yoy decline in GDP in Q1 combined with
an already weak end to 2012, offers a negative base effect. By our
estimates, the remainder of the year would have to see significant
positive growth to meet the Commission/IMF forecasts. With leading
indicators still in recession territory, this seems challenging.
Bottom line: Things are improving, but clearly they are still tough.To us the biggest story is that Greece as a positive story is being talked about at all.
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