Wood & Company, the global investment and financial group, is closely monitoring Greece’s economic outlook amidst concerns over potential wildfires and floods in 2024. Despite maintaining their growth forecast at 2.8%, the firm remains cautious about the impact of these natural disasters.
According to the financial group, Greece has successfully navigated the post-2010 economic adjustment period. They estimate the current potential GDP growth around 3%, supported by robust private sector finances and a stable public sector budget, which helps keep borrowing costs in check.
Eurostat reports a per capita GDP of 20,920 euros in 2023, marking a 7% increase from the previous year but still 2% lower than pre-crisis levels in 2009, while exports accounted for 38.1% of GDP in the first quarter of 2024, a significant improvement from 24% in 2010.
The economy in 2024 benefits from EU funds, substantial foreign direct investment (FDI), and normalized credit conditions for businesses, though Wood & Co. describes it as a transitional period.
Furthermore, corporate deposits are on a modest rise, while lending to non-financial corporations remains robust. Household lending, though declining, shows signs of stabilization compared to previous years.
Household surveys highlight persistent inflation, limiting purchasing power as wage growth remains stagnant. Economic indicators also suggest a somewhat sluggish labor market, with mixed sentiments from businesses.
The housing market continues to show strength, with apartment prices increasing annually by 10.4% in early 2024, down slightly from previous years.
Tourism is a bright spot, with the Bank of Greece data revealing a 22% increase in travel receipts for the year, signaling a strong start to the tourist season.
However, concerns loom over potential natural disasters, with reports of wildfires resurfacing this year following last year’s impactful events, with the company warning that these could once again disrupt economic activity.
