Optimistic forecasts for the Greek economy

The Eurozone appears to be emerging from the “artificial recession” phase it entered in the previous two quarters, and as a result, Greek economic growth will remain strong, based on Stability Program forecasts, this year and in the coming years.

Two good news from Brussels and Frankfurt for the Greek economy. The first concerns the growth rate of the eurozone in the second quarter of this year, showing a clear acceleration trend compared to the first quarter (0.3%). The second concerns the inflation rate: despite the fact that in April it remained at 2.4%, it is estimated to remain on a downward trajectory in accordance with the targets set by the ECB. This development strengthens the prospect of lower interest rates not only in June, but possibly also in July, if the trend is likely to be confirmed in the next period.

With this in mind, the eurozone appears to be emerging from the phase of “artificial recession” it entered in the previous two quarters, and even in the context of falling inflation, which opens the way for lower interest rates in the coming months, with all the ensuing consequences for strengthening disposable income. income, consumption and investment.

Such a positive environment ensures that growth in the Greek economy will remain strong, based on the forecasts of the stability program, this year and in the coming years, say economic experts aware of the processes taking place in Brussels and Frankfurt.

The stability program presented to the commission midweek forecasts Greece's growth rate at 2.5% this year and 2.6% in 2025. The forecasts are based on private consumption growing at an annualized rate of 1.6% over the two years 2024-25, driven primarily by rising disposable income, rising wages and falling inflation.

Public consumption will move in the opposite direction, with growth rates at low levels this year (0.7%) and negative levels in 2025 (-2.5%). However, more important than private consumption will be the contribution to the growth of private investment, writes CNN Greece. According to the program, gross fixed capital formation is expected to increase by 9.1% in 2024 and 14.4% in 2025 as a result of the absorption of funds from the Recovery Fund, lower interest rates and the creation of a more favorable environment for Greece, restoring the investment level of the economy .

Experts estimate that investment as a share of GDP will increase from 14% in 2023 to 17% in 2025, narrowing the gap with the eurozone average (22% in 2023).

As for the primary budget surplus, the program predicts: it will be formed at the level of 2.1% of GDP this year and in 2025, and the deficit of the general government sector will be at the level of 1.2% of GDP this year and 0.9% in 2025 year. Government debt is projected to fall from 152.7% of GDP this year and 161.9% of GDP last year to 146.3% of GDP in 2025.

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