We continue to see the Greek economy slowly emerging from its multi-year recession. It is moving in the right direction, but slowly. We're holding our forecasts unchanged from our last quarterly report. That means that after an estimated 4.4% GDP contraction in 2013 (the sixth consecutive year of recession) we finally see positive growth of 1.1% this year, rising to 1.8% in 2015 and levelling off at 1.4% in 2016.

We still see little scope for impetus from household, government, or business spending, all of which remain weakened by the long crisis. In contrast we believe the driver of the limited recovery that is underway is net exports. However this necessary rebalancing of the country's external trade performance is happening in a sub-optimal way. Much of the improvement in trade has come from the collapse in domestic demand rather than through a significant improvement in export competitiveness (although some inroads have been made in this area). By relying more on a drop in imports than competitiveness gains, Greece's longer-term growth trajectory will be adversely affected.

Greece's outward-looking shipping sector continues to be partly protected from the full force of the domestic crash. European transit freight demand plays an important part in determining overall activity levels, as does investment in port facilities. Because of this the Port of Piraeus has been able to show yearon- year (y-o-y) gains in both tonnage and container traffic since 2011, despite falling Greek GDP. Indeed, we have raised our box traffic growth forecast for this year to an impressive 20%. The Port of Thessaloniki, which has lacked the benefits of large new investment, has followed a rather more volatile path with some quite sharp contractions in volume in 2011 and 2013, and this year is set to achieve growth in only a 1%-2% range.

Headline Industry Data

* 2014 port of Piraeus tonnage throughput forecast to grow 7.8% to 16.685mn tonnes; over the medium term we project average annual growth of 5.7%.

* 2014 port of Piraeus container throughput forecast to grow 20.0% to 3.82mn twenty-foot equivalent units (TEUs); over the medium term we project annual average growth of 14.2%.

* Port of Thessaloniki tonnage to grow 1.8% to 13.211mn tonnes in 2014, and average 2.1% on the medium term

* Port of Thessaloniki box traffic to gain 1.5% in 2014 to 327,144 TEUs, and to average 2.0% annual growth in the period running up to 2018.

* 2014 total trade growth forecast at -0.7% a slower contraction than the -2.3% estimated for in 2013.