The growth bar for 2024 has been set high, according to what is foreseen in the draft budget, which has already been submitted to the Parliament. However, the fluid economic and geopolitical environment, if nothing else, make it difficult to achieve the goal, which is an increase in GDP by 3%.

It should be noted that this estimate is significantly higher than that which exists for growth both in the Eurozone and in the EU, which are 1.3% and 1.4% respectively.

The Ministry of Finance is well aware of this and for this reason they believe that there are pillars on which the Greek economy can be supported, so that it can overcome the hurdles that have been encountered and will be on the way to achieving the goal in 2024.

There are two keys that can bring the “spring” to the economy. One is the tourism, showing signs of endurance and growth. And the other has to do with the investmentswhich are estimated to unlock even more by achieving investment grade, which the government hopes will happen by 2023.

On the other hand, however, there are two factors, directly connected to each other, that can bring changes in planning and shocks in the economy. One is directly related to the unrest in the Middle East and the fears that exist for a jump in the price of oil in the event of an escalation or involvement of more forces in the region.

In the inevitable event that this happens, it will bring new inflationary pressures and in fact at a time when there are tangible signs of a significant de-escalation of inflation close to acceptable levels, i.e. below 2%.

The keys to development

1. Investments: The Ministry of National Economy and Finance gives great importance to the arrival of investments for 2024 and this is the main reason why in the draft it is estimated that the increase compared to this year will be of the order of 12.1%. This will primarily be achieved due to the fact that Greece will obtain, barring a shocking prospect, the investment grade from the rating agencies, within the year. Thus, foreign investors will see Greece again on the investment map and will be able to bring money to the country, since many have not done so to date as their statutes prohibit it, due to a lack of investment evaluation.

2. Tourism: This year, Greece is expected to achieve record receipts and arrivals, breaking that of 2019. Market factors place the amount of travel revenue at 20 billion euros, and the Ministry of Finance considers, and is contained in the draft, that in relation to 2023, the following year will another billion euros should be added.

Fears of a slowdown

In contrast to the expected positive developments, there are also fears, which have intensified after the hideous attack by Hamas on Israel and the response that the latter are preparing. Who are they:

1. Action: Primarily oil and secondarily natural gas and by extension electricity are the big volatile factors. Serious concerns are expressed that in the event of an escalation and involvement of more countries in the Middle East in the conflict, the price of oil may soar to very high levels. The main fear centers on Iran and the role it can play. Remember that it controls the Straits of Hormuz through which 1/3 of the world’s production passes. There are similar fears for natural gas, which in recent days has made a mini-rally even exceeding 55 euros per megawatt hour, while a few months ago it was a little over 20 euros.

2. Inflation: For almost two years now, the big “headache” for the global economy has been inflation. In the last months there are clear signs of de-escalation and it seems possible by the end of the year, the goal is to fall below 2%, which is the acceptable limit to reach. However, in the event of a small or large energy shock, it is self-evident that we will enter a new period of inflationary pressures, which will further limit consumption, which is also one of the main factors of growth.