A Russian invasion of Ukraine would weigh on Greece’s growth rate, severely impact inflation, reduce disposable incomes and make the country’s tourism prospects less rosy in 2022, according to a new Moody’s Analytics report.
Deputy Director Michalis Grammatikopoulos notes that the military conflict in Eastern Europe has led Moody’s to change its growth forecasts by 0.8 percentage points, to 4.5% for 2022, under the base scenario, while inflation will hit an all-time high of 7.7% this year before easing and a possible easing to 3% in 2023.
It is noteworthy that the unfavorable scenario provides for GDP growth of only 1.9% in 2022 and 1.5% in 2023 (other sources give even a minus in GDP growth. Editor’s note).
He adds that the duration and magnitude of energy shocks have a strong impact on prices in the economy, so, combined with rising global food prices, inflation will exceed 8% in the second and third quarters.
Moody’s predicts that while Greek tourism has outperformed expectations in 2021, it will face major challenges this season due to global inflationary pressures and the war in Ukraine. It says that about a quarter of the slowdown in GDP caused by the war is due to the lack of Russian tourists in Greece, which means a loss of 400 million euros in revenue for the entire year.