GDP

Behind the economic optimism over Greece's GDP growth and tourism sector, the report reveals that Greece's living conditions continue to be plagued by the deep-rooted issues of poverty, deprivation, and economic strain.

Compared to the same quarter of the previous year, seasonally adjusted GDP increased by 0.6% in the Eurozone and by 0.8% in the EU

At the same time, the formerly bailed east Mediterranean country records the biggest decrease in debt-to-GDP, on a quarterly basis

Besides Greek GDP inflation is expected to drop by a substantial 2.4% in 2024, settling at 2.8% from 4.2% in 2023 with 2025 recording a further decline to 2.1%.

Key downside risks remain, associated with possible delays in deploying Recovery and Resilience Facility (RRF) funds and weaknesses in key export markets and tourism source countries

Eurostat data revealed a significant 10.8% drop in Greek public debt relative to GDP in 2023, alongside a 2% economic expansion, outpacing Germany's performance.

Annual inflation is expected to reach 3%, up from the previous forecast of 2.8%

Projected consumer prices are forecast to rise by 2.7%

The increase in private consumption accelerated faster than anticipated, rising by 1.4% quarterly in the last quarter of 2023, while exports also provided an upward surprise, recording a 0.4% increase

Greeks’ purchasing power is under pressure, ranking 26th among 27 EU member states.

BofA projects growth of 1.1% in 2024 and 1.7% in 2025, compared to forecasts for eurozone growth at 0.4%/1.1%, respectively

Only Bulgaria is in a worse position

Investments and private consumption are expected to be the key drivers of economic activity in the coming years

Figure still higher than Eurozone average; jobless figure falls to 10.5% in 4Q 2023, according to Hellenic Statistics Authority (EL.STAT)

The central bank forecasts were listed in the "Note on the Greek Economy" report

KEPE underlines that the implementation of important reforms and investments through the utilization of funds from the Recovery and Resilience Facility and the new ESPA also play a role in the more positive outlook of the country’s economy

The report notes that consumption growth remained notably reduced despite a robust recovery in 2022, adding however, that it remained one of the main drivers of growth last year

Conversely, the growth forecast in 2023 lowered to 2.2% of GDP instead of previously announced 2.4%

Inflation rates will remain above the ECB limit (2%), not only for 2024 but also for 2025, something that will continue to test the resilience of consumers, especially if new geopolitical challenges arise that might exacerbate the already precarious situation

The leaders are the Southern Aegean, accounting for 27% of revenues, Crete with 21%, Attica with 17%