Greece’s economy grew steadily in the first half of 2022, but inflation dampened growth in the latter half. The nation’s government cushioned the impact of rising energy prices on businesses and households’ real incomes, and the Recovery and Resilience Plan provided significant support to the economy. Real GDP growth is expected to have reached 5.5% for 2022.
Falling inflation rates are expected to relieve the burden on households and benefit private consumption. The implementation of the Recovery and Resilience Plan is projected to drive investment growth, offsetting the decrease in corporate investment due to tighter financing conditions. Exports are forecasted to pick up speed in 2024 with the external environment slowly improving in the second half of 2023.
Tourism is a significant factor in Greece’s economy, and the growth outlook is vulnerable to downside risks related to geopolitical tensions. Despite the risk, receipts from international tourism are expected to increase in 2023 and 2024. Headline inflation is predicted to decline from 9.3% in 2022 to 4.5% in 2023 and 2.4% in 2024. Nonetheless, there are upside risks to inflation due to the planned increase in the minimum wage, which has yet to be determined by the Greek authorities.
Greece’s economy is expected to grow by 1.2% in 2023 and to increase to 2.2% in 2024. Food prices are predicted to remain high due to the lagged pass-through of elevated energy prices on food production. However, the forecast suggests that falling energy prices and associated negative base effects should keep inflation in check.
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