Piraeus Bank estimates the growth of the Greek economy in the medium term will remain at a steady pace, approaching the two-percentile level in 2025 in an analysis.
In its assessment, the Greek systemic bank stresses that the country will continue on a path of economic expansion amid a volatile global climate. Greece’s real GDP in the first nine months of 2024 increased by 2.3% on a year-on-year basis, marking a substantially higher growth compared to the Eurozone average rate which stands at 0.6%.
On the labor market front, Piraeus Bank reports that the jobless rate continues on a downward trajectory, driven primarily by an increase in employment. This trend, according to the Employment Expectations Index, is expected to persist in the medium term, simultaneously boosting the overall disposable income of households and consumer spending.
As Piraeus Bank notes, an essential condition for forming a sustainable labor market is the gradual rise in the labor force participation rate, meaning a higher inflow and retention of individuals in the workforce. It is noted that this rate in Greece stood at 52% in 2023, compared to 58% in the Eurozone.
Regarding private consumption, Piraeus Bank expects it will remain the main component of GDP and a key driver of growth. However, it adds that the growth prospects of the Greek economy depend on leveraging European and national funds to implement investment projects and boost entrepreneurship.
According to the analysis, this development will have a dual effect: on the one hand, the value of the investment will directly contribute to GDP and mathematically improve the growth rate. On the other hand, in the long term, it will have a multiplier effect by supporting new jobs and enhancing the productivity of fixed capital.
