The European Commission predicted strong growth for Greece – at 7.1% in 2021 and 5.2% in 2022 – in its autumn economic forecasts released on Thursday. Revising their forecasts for 2021 upwards from those published in July (4.3%), and slightly downwards for Greece for 2022 (from 6%).
The commission’s report coincides with a report by the Greek statistical office ELSTAT, released a day earlier, which recorded inflation of 3.4% in October – the highest level in a decade and is on an upward trend.
Commission report: economic growth
According to the Commission’s report, “The Greek economic recovery is gaining momentum, driven primarily by domestic demand and a better-than-expected tourism season. The impact of the pandemic is expected to gradually soften, while adaptive fiscal and monetary policies, coupled with strong stimulus from the recovery and resilience plan, are intended to maintain momentum in the future. The bailout measures are adapting to the changing needs of the economy and are expected to be largely phased out by the end of 2021, which will help reduce the government budget deficit. ”
The report highlights that the Greek economic recovery accelerated in 2021 as it “recovered significantly in the second quarter of 2021, up 3.4% from the previous quarter. Real GDP reached its pre-pandemic level in the second quarter of 2021. The recovery was driven by domestic demand, in particular investment and stockpiling, while the current fiscal stimulus has played a decisive role in supporting the economy. ”
“The autumn forecasts of the EU Commission confirm that Greece is following the right economic policy,” Finance Minister Christos Staikuras commented on the EU report.
ELSTAT report: inflation
Inflation in Greece hit a 10-year high in October at 3.4% year-on-year, the Greek Statistical Office (ELSTAT) said Wednesday, mainly due to doubling natural gas tariffs and higher fuel and food prices. The latter is expected to put pressure on vulnerable households, which need to spend most of their budget on food purchases.
According to the published data, the price of natural gas increased by 132.3% over the year, while fuel oil rose by 45.9%. The cost of automobile fuel increased by 22.3%, electricity by 18.9%.
Currently, there is a significant jump in food prices: olive oil and vegetables last month showed price increases of 22.1% and 9.3%, respectively, continuing the trend. Now they are joined in the price dynamics of potatoes (9.1%), bread (3.9%), poultry (8.5%) and fish (7.9%). In general, in the category “Food and non-alcoholic drinks” prices increased by 3% compared to October 2020.
“Worse, despite initial estimates that the CPI will decline by the end of the year, all signs point to the exact opposite,” notes kathimerini… According to representatives of large supermarket chains, consumer prices have not yet taken into account the increases indicated in the price lists of suppliers – this is now expected by the end of the year. In addition, some enterprises that have not yet raised prices due to the fact that stocks of raw materials were purchased from them at a lower price, will increase prices next year.
The last time inflation in Greece exceeded 3% was in October 2011, the newspaper reminds, adding: “International news leaves no room for optimism. While natural gas tariffs have begun to decline due to a change in Moscow’s supply policy, this does not apply to world prices for a range of raw materials needed for food production. ”
PS Meanwhile, Greece’s national debt rose to 522 billion euros, or almost 600 billion dollars, with a GDP of 263 million euros (302 billion dollars), which is 206% of GDP. This is more than 50 thousand euros for each citizen of the country.
PPS Regarding the inflation rate of 3%, there are vague suspicions that after the change of government, and maybe even earlier, someone will go to jail on charges of falsifying statistical data. It is impossible otherwise, the tradition is to seek guilty of the ELSTAT leadership has already become a tradition.