By Chrysostomos Tsoufis

At 12 noon we will get the first taste of this year’s course of the Greek economy as the ELSTAT will announce its first estimates for first quarter GDP. We will see if the growth rate is within the trajectory of the Ministry of Finance’s (official) estimates for an increase of 2.3%. I am writing officially, because unofficially this forecast has been abandoned given the exceptional course of the budget which had pushed officials of the previous leadership of the Ministry of Finance to talk about a growth rate this year of 3%, conservatively speaking.

Estimates shared by the market. Just yesterday the CEO of Piraeus Bank, Christos Megalou, told the Bloomberg agency that he expects the Greek economy to grow this year at a rate of around 3.5%, which is almost twice the European average. More conservative, but also above budget estimates, and the Morgan Stanley which speaks of a growth of 2.5%.

When the New Republic government was planning the 2023 budget, they assumed that the average price of natural gas would be in the region of €120/Mwh. Who would have guessed that the price has fallen to the rocks, just over €25 which is the lowest since September 2021? In fact, the future contracts until February 2023 do not have a price higher than €44, and the European warehouses are 60% full, while the first joint supplies have already started LNG. As long as things remain as they are and with the assumption that consumption will remain the same – even though it has declined – a benefit is created in the state coffers at a cost of €5 billion that directly affects the GDP by at least 50%.

There is also a benefit from the price of oil, which this year has not “caught” a single day of $90/barrel, the price at which the state budget has been structured.

Tourism is also expected to exceed estimates, the performance of which was key to achieving a growth rate of almost 6% last year and significant fiscal space that enabled the government to take additional measures to support households and businesses. For this year, the revenue target has been set at €18 billion, but its leadership is solid YOU ARE has been talking since the end of May about a new historical record in both revenue and arrivals from abroad.

In addition, industrial production shows a small increase of 1.8% compared to last year’s first quarter, the turnover of Greek companies increased in the first 3 months by €7 billion or 8.3%, while the first two months show a small increase and the construction activity both in building permits both in terms of surface area and volume. Also the almost 14% increase in turnover in retail trade in the first quarter shows that households are spending.

In addition, Morgan Stanley expects a new investment record this year.

If all this really leads to much greater growth, then the new government that will emerge after the June 25 elections will have significant fiscal margins for measures to support households and businesses.