Growth of 6.7% this year and 4.8% in 2022, the OECD predicts in its semi-annual report on the global economic outlook, while for 2023 it estimates that GDP will grow by 2.9%.
Strong growth, according to the Agency, is projected as the improved business climate and the national recovery plan boost incomes and investments, while government support will continue – to a limited extent – to support incomes and consumption in 2022, with a further impetus given by the 2% increase in the minimum wage from the beginning of the new year. Exports will be boosted by the recovery of global demand and global tourism.
Investment and private consumption are expected to accelerate in 2022, recording an increase of 17.3% and 4.4%, respectively, from 14% and 2.1% this year. Exports of products and services are expected to grow 14.2% this year and 13% next year.
Unemployment is estimated to fall this year to 14.6% from 16.3% last year, while it is expected to decline significantly in 2022 to 12.9%.
A key risk, according to the OECD, is that deteriorating health conditions will lead to new travel restrictions and limit the recovery of tourism.
The OECD says inflation expectations are rising and by mid-2021 are above the average of recent years in manufacturing, construction and retail, but notes that price increases are likely to be limited by slow production capacity. economy. The harmonized index of consumer prices is projected to reach 3.1% in 2022 at average levels compared to 0.4% this year and structural inflation – which does not take into account the prices of food, energy, alcohol and tobacco – to reach 1.9% from -1.2%, respectively.
“Developing budget support can help maintain the recovery in the face of ongoing headwinds and uncertainty. Public investment is expected to be boosted to support growth. This, together with a medium-term fiscal plan, would contribute to fiscal sustainability, “the OECD said, adding that” better targeting of support measures, such as reductions in VAT rates for sectors such as entertainment, would enhance their impact. “
The budget deficit is projected to decline from 9.6% of GDP this year to 4% in 2022, while for 2023 a primary budget surplus is projected. Public debt is estimated to have peaked at 206.3% of GDP last year and will fall to 192% this year and further to 180.6% in 2022 and 174.6% in 2023.
The OECD recommends focusing on active labor market and education programs, implementing measures to increase public sector efficiency, such as further progress in the digitization of public services, and completing efforts to restore banks’ resilience. “The implementation of a comprehensive plan for adaptation to climate change – which is already affecting Greece – and its mitigation will be imperative to maintain long-term growth,” he notes.
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