Navigating Greece's Producer Price Inflation: Where to Invest Amid Sectoral Divergence

The Greek economy is at an inflection point. While the headline Producer Price Index (PPI) for March 2025 dipped 1.7% month-over-month, the underlying sectoral dynamics reveal a compelling story of opportunity. Amidst global volatility, Greece's manufacturing and energy sectors are defying the odds—and investors who act swiftly can capitalize on these divergent trends.

The PPI Paradox: Inflationary Pressures and Hidden Gains

Greece's PPI for industrial goods stands at 117.9 points in March 2025, down from February's 120.6 but still 5.7% higher year-over-year. This masks a critical truth: sectoral performance is wildly uneven. While energy and intermediate goods are surging, non-durable consumer goods face deflation. The divide is stark—and actionable.

Sector Spotlight: Energy—Riding the Volatility Dragon

Energy prices rose 5.2% annually in March 2025, driven by global supply chain bottlenecks and domestic infrastructure challenges. Despite a sharp 5.8% monthly drop in March, this sector remains a high-reward play.

• Why Invest Now?
• PPC (Public Power Corporation) is a linchpin. Its pivot to renewables—expanding solar and wind capacity—aligns with Greece's 2030 decarbonization targets.
• Risk Mitigation: Short-term dips are inevitable, but long-term demand for energy resilience is structural.

Intermediate Goods: The Steady Growth Engine

Intermediate goods (raw materials for manufacturing) saw a 3.7% annual price increase, with steady demand from industries like chemicals and cement. This sector offers predictable returns in an uncertain market.

• Top Plays:
• Hellenic Petroleum (HELPE): Benefits from rising demand for petrochemicals and refining margins.
• Titan Cement: Capitalizing on infrastructure projects, including EU-funded upgrades to Greece's road and port networks.

The Dark Horse: Non-Durable Consumer Goods—Avoid Until Demand Rebounds

While the broader economy shows resilience, non-durable consumer goods face -0.4% annual deflation, signaling weak consumer spending. Hold off on sectors like textiles and foodstuffs until inflation stabilizes.

Risks on the Horizon—And How to Navigate Them

1. Global Slowdown Threats: Trading Economics forecasts a -2.0% PPI by 2026, driven by potential energy price collapses.
2. Debt Overhang: Greece's public debt at 113% of GDP limits fiscal support for struggling industries.

Mitigation Strategy: Focus on companies with low leverage and renewable energy exposure, which are less tied to government fiscal cycles.

Actionable Investment Themes for Q2 2025

1. Energy Plays:
2. Buy: PPC for its renewable expansion and stable dividends.

3. Hedge: Use futures contracts to offset short-term energy price swings.

4. Intermediate Goods:

5. Invest in HELPE for its petrochemicals division and exposure to industrial recovery.

6. Titan Cement for infrastructure-driven demand.

7. Avoid: Non-durable consumer goods until the sector shows sustained pricing power.

Conclusion: Act Before the Data Floodgates Open

While May 2025's PPI data is pending, the March trends are a clear roadmap. Energy and intermediate goods are the high-octane sectors to own. With Greece's economy transitioning to green energy and manufacturing modernization, now is the time to allocate capital to companies with structural tailwinds.

The PPI divergence isn't just data—it's a call to action.

Invest with precision—and seize the divergence.

Disclaimer: Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.