+2.1% annual growth in 2024, marginally higher than in 2023; boosted by the strengthening of investments (+14.1%, fixed investments +9.7%) and household consumption resistant to inflationary pressures (+1.3%, total consumption +0.9%), IOBE estimates in quarterly report of. In the external sector, a worsening of the current account deficit is expected, with imports at constant prices up +1.8% year-on-year and exports to decrease marginally by -0.4%.

Significant risks stem from tighter fiscal policy, the deterioration of the external balance, the persistence of inflation and uncertainty at regional and international levels.

In the first quarter of 2024 the unemployment rate showed an increase of 0.3 percentage points, to 12.1% from 11.8% a year earlier. The sectors with the largest annual growth in employment were tourism, catering, transport and construction. The wage cost index showed an increase in the first quarter of 2024, while labor participation also registered a marginal increase. As the country approaches single-digit unemployment, further declines in the coming quarters will inevitably be slower. Employment, IOBE estimates, is expected to strengthen more gently in 2024, due to the upward trend in consumption, investments and in individual sectors of industry and services. The unemployment rate for 2024, according to IOBE estimates, is expected to be around 10.3%.

The rate of change of the GDP was set at 2.8% in the first half of 2024, up from a 4.2% rise a year ago. The strengthening of prices is mainly due to the positive impact of domestic demand, as well as persistent inflationary pressure on essential goods such as food. IOBE estimates that prices will remain on a milder upward trajectory throughout this year, in the region of 3.0%, mainly due to the expected rise in prices of energy goods.

In the banking system, among the positive trends, the expansion of credit to businesses, the improved indicators of organic profitability, liquidity and capital adequacy of the banks stand out, as well as the lower cost of private sector borrowing combined with its convergence with the corresponding cost in other countries. Negative trends include an eight-year increase in banks’ NPL ratio, a high stock of bad loans on and off bank balance sheets, an increase in banks’ exposure to government bonds, a contraction in credit to households and a high interest margin. The timely implementation of the expanded loan component of the National Recovery and Resilience Plan is an opportunity as well as a bet for the financing of productive investments on favorable terms.

During the presentation of the Exhibition the General Director of IOBE, Professor Nikos Vettas, he emphasized the importance of investments in the new production model, while he pointed out the challenges in the international environment, while making reference to the economic course of the country that completes 50 years of democracy.

Among other things, he noted:

• Investments are crucial for the Greek economy both in the short and long term. In the short term, some factors that supported the rise in consumption and exports are waning. In order to maintain the rate of growth of the Greek economy, a high rate of investment growth must be recorded.

• The accumulated investment gap remains large. In order to achieve high long-term growth rates, it is a condition that investments in the country grow at a multiple rate of that of the rest of the economy.

• The investment mix is ​​of high importance in the medium term, to primarily support export activities and new production, with innovation. Stabilizing a favorable regulatory and fiscal framework and assisting the development of human capital can contribute in this direction.

• The formation of the conditions for further reduction of unemployment and strengthening of the labor force is decisive. The gradual shift of production towards higher value is the only way to achieve high prosperity in the country in the coming years.

• The international environment presents strong economic and geopolitical challenges that may hinder the course of exports and investments.

• The Greek economy completes 50 years since post-colonization, during which significant progress but also lost opportunities were recorded. Incomes increased, inequalities decreased, property values ​​increased, infrastructure improved. Integration into European institutions contributed to strengthening stability. However, growth rates lagged behind most European countries and public borrowing expanded, while the qualitative characteristics of growth do not ensure strong growth in the long term.

• Having balanced a succession of positive periods as well as periods of deep crisis, our economy is facing the challenge of strengthening growth rates. This requires boosting productivity, a priority that can only be achieved through productive investments in physical and human capital.