The Greek economy posted strong growth in the first half of 2022 and is projected to remain on a growth trajectory in 2022, 2023 and 2024, above average EU and the eurozone, the European Commission said in its winter economic outlook report released on Monday.
According to forecasts based on data provided by ΕΛΣΤΑΤthe Greek economy will grow by 5.5% in 2022, 1.2% in 2023 and 2.2% in 2024, exceeding eurozone growth forecasts of 3.5%, 0.9% and 1.5% respectively and in the EU by 3.5%, 0.8% and 1.6%.
The Commission’s forecasts have been revised down slightly for 2022 from previous November forecasts (6%) and slightly up for 2023 and 2024 (1% and 2% respectively).
The Greek economy showed strong growth in the first half of 2022, but rising inflation weighed on growth in the second half of the year, the EU executive said in a report. The Recovery and Resilience Fund (RRF) has provided significant support to the economy, and government measures have softened the impact of energy prices on business input costs and household real disposable income. Overall, real GDP growth is expected to reach 5.5% in 2022.
It is expected that lower inflation will gradually ease the burden on real incomes of the population and have a positive impact on private consumption. The timely and effective implementation of the Recovery and Resilience Plan (RRP) is forecast to remain a major driver of investment growth, partially offsetting weakening corporate investment due to tighter funding conditions. As the external environment gradually improves in the second half of 2023, export growth is expected to pick up in 2024. International tourism receipts are projected to increase in 2023 and 2024. Overall, real GDP is projected to grow by 1.2% in 2023 and up to 2.2% in 2024.
Energy price inflation has eased since peaking in September 2022, and HICP inflation will continue to decline over the forecast period on the back of declining energy prices and the associated negative base effect. However, food price inflation is expected to be more robust given the lag in the impact of high energy prices on food production. After averaging 9.3% in 2022, core inflation is projected at 4.5% in 2023 and 2.4% in 2024.
The announced increase in the minimum wage, due to take effect in April 2023, has not been included in this forecast, as the Greek authorities have not yet determined its scope. The growth outlook for the Greek economy is subject to downside risks related to the potential impact of geopolitical tensions on international tourism. In terms of risks to the inflation outlook, upside risks are associated with the aforementioned increase in the minimum wage.
PS Why most Greeks do not see this growth is a well-kept secret and, of course, a miracle in the reliable employees of the country’s statistical office, who are no strangers to serving prison sentences for falsification. After all, they pay very well for this …
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