The slowdown in growth, according to the Commission, is almost entirely due to inflation
By Chrysostomos Tsoufis
After a much better than expected 2022, the Commission estimates in its autumn forecasts that Greece will have a difficult year in 2022, although not worse than the Eurozone average.
For this year, the growth bar is set at 6% against 4% in the summer estimates. Inflation also revised upwards to 10% from 8.9%. For 2023 the growth rate will slow significantly to 1% against 2.4% previously estimated while inflation will remain very high with the magnitude revised to 6% against 3.5% in the summer announcements.
The slowdown in growth, according to the Commission, is almost entirely due to inflation. Households are expected to adjust their consumption to the higher prices and the erosion of their incomes that these entail.
In addition, amid uncertainty, increased costs, tight economic conditions and a slowdown in demand, a fall is also expected for investments. Exports will also lose momentum since the slowdown in growth will be global in the second half of this year and in 2023.
Nevertheless, tourism will remain the strong card of the country and will continue to bring significant income.
The Commission considers that growth in the country will begin to accelerate towards the end of 2023 and will form a good basis for 2024 in which Greece is expected to grow by 2%.
In its report, the Commission makes special mention of the government’s tax reductions, which in 2023 will reach €3.5 billion, the increase in the minimum wage and the subsidies for energy costs that contribute to mitigating the fall in real wages due to the high and persistent inflation.
The report notes 2 asterisks that may lead to even worse results and have to do with the ongoing geopolitical tensions and the drop in incomes in the countries from which Greece receives tourists.
In this climate, Greece is expected to return in 2023 to primary surpluses of around 1.1% and in 2024 it will be even higher as the withdrawal of energy support measures is then expected to be completed.
The debt will continue its downward course reaching 161.9% of GDP in 2023 and 156.9% in 2024 from 171.1% of GDP that will close this year.
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I have worked in the news industry for over 10 years and have been an author at News Bulletin 247 for the past 5 years. I mostly cover technology news and enjoy writing about the latest gadgets and devices. I am also a huge fan of music and enjoy attending live concerts whenever possible.
