UniCredit has revised its outlook for the Greek economy, changing its 2024 GDP projection from 1.9% to 2.3%, citing a strong net impact on economic expansion in a report.
The Italian-based multinational banking group points out that a rise in Greece’s industrial activities contributed to a robust surplus in final (FGs), semi-finished (SFGs), and intermediate goods and a notable rise in imports.
Justifying its positive outlook, UniCredit notes that fixed investments will likely be further boosted by funds flowing from the EU Recovery Fund and foreign direct investments (FDI).
The report stresses that the Greek economy is set to benefit from private consumption, and is expected to get a boost from a rise in real disposable income in the wake of a fall in inflation vis-à-vis the rise in nominal wages.
Despite the positive nominal wages-real disposable ratio, inflation accelerated by 0.3 percentage points to 3% year-on-year in August, due to a significant rise in electricity prices and, to a lesser extent, food price inflation, while core inflation remained unchanged at 3.7%, UniCredit says.
UniCredit expects inflation to slow down in the coming months due to the normalization of energy, food, and industrial product prices. Weak global demand is likely to make it difficult for manufacturers to pass on the increase in intermediate goods prices and shipping costs to customers. Core inflation is projected to decline more gradually due to persistent inflation in service prices.
The Italian firm also highlights the government’s commitment to adopt neutral fiscal policies for 2025, as the budget aims to achieve a broader stabilization of the primary surplus at around 2%.
