IOBE maintains its estimate for annual growth of +2.4% in real terms, taking into account the slowdown of the European economy, in conditions of high inflation, tighter fiscal and monetary policy and uncertainty.

In terms of components, consumption is expected to contribute significantly to growth, with an annual increase of +1.6%, combined with an annual increase in investment of +3.0% (fixed investment +10.0%).

In the external sector, a slight improvement in the high current account deficit is expected, with exports and imports increasing annually in 2023 by +3.5% and +2.6% respectively.

For 2024, IOBE estimates similar to this year in terms of annual growth, of the order of +2.4%. In terms of components, only investment is expected to exceed this year’s performance, with higher annual expansion in 2024 (+7.8%) while consumption is expected to slow (+1.0%).

In the external sector, the mild improvement in the current account is expected to continue, with exports and imports increasing annually in 2024 by +2.6% and +2.3% respectively, as reported in a press conference today.

During the presentation of the Report, the general director of IOBE, Professor Nikos Vettas, emphasized that the challenges of the external environment endanger the positive dynamics of the Greek economy. Among other things, in relation to developments in the international environment, he noted:

* Geopolitical tensions are intensifying, with renewed ignition in the Middle East, maintenance of the war in Ukraine, search for a broader direction of global balance.

* International trade is being pressured by geopolitical developments, the cost of money and uncertainty are affecting investment and the center of gravity of the economy is moving out of Europe.

* Persistence of structural inflation, maintenance of high central interest rates in the foreseeable future, shortfall in supply-side interventions.

* Taking into account the needs of the green transition and the demographic pressures, it follows that the rise of the standard of living in Europe depends on the application of more effective rules, the strengthening of the skills of workers and the integration of innovative technologies in production.

In relation to developments in the domestic economy, Mr. Vettas noted, among other things:

* The Greek economy continues to move with a positive sign. The domestic growth rate is higher than in most other European economies, with investment gradually increasing and unemployment falling.

* The gradual recovery of the “investment grade” of the public sector, after 13 years, reflects the strengthening of international confidence in Greece. To preserve it, the short-term fiscal balance is not enough, but the strengthening of the productive capacity of the economy in the medium term is important.

* In the short term, pressures in the external environment create challenges in two of the most critical variables for the growth prospects of our economy, namely exports and investments.

* The Greek economy is moving from a low base in terms of investment and employment, and faces higher challenges in the medium term, especially in terms of public debt and demographics. As unemployment declines, as does the investment gap, further growth will require rising productivity and attracting new resources.

* In order for there to be a continued and sustainable rise in incomes, it is necessary to have a shift to high productivity activities that will produce products and services with high international competitiveness. Beyond the recovery of sectors that have traditionally been of great importance to our economy, such as the real estate market and tourism, it is crucial to systematically strengthen manufacturing and high-tech sectors.

* Overall, changes in the state, infrastructure and basic services, such as justice and education, must support entrepreneurship, especially in innovative and extroverted sectors.