Brussels keeps growth forecast at 2.3%
The European Commission estimates in its winter forecasts that Greece will achieve the fourth highest growth rate in the eurozone and almost three times its average in 2024.
Brussels predicts a growth rate of 2.3% in Greece, unchanged from its fall forecasts, compared to 0.8% in the eurozone, for which it downwardly revised its forecast from 1.2% in the fall. Nevertheless, 2.3% is significantly lower than the 2.9% forecast by the government in the 2024 budget.
For 2023, the Commission's winter forecasts indicate a growth rate of 2.2%, lower than the previous, fall forecasts, but also the government estimate in the budget for 2.4%. And for 2025 the forecast is for 2.3% against a previous forecast of 2.2%.
Regarding inflation, the Commission estimates that it closed at 4.2% in 2023 (compared to 5.4% in the eurozone) and that this year it will fall to 2.7%, exactly the same as the eurozone average, while it will further decrease to 2.1% in 2025. The government predicts 4.1% for 2023 and 2.6% for this year.
“What we have is solid growth and good forecasts for 2024-2025, which is very interesting if we compare them with the average in the eurozone,” Economy Commissioner Paolo Gentiloni said on Thursday about Greece, presenting the winter forecasts. “Of course, promoting investment and implementing the recovery and resilience plan are essential to sustain growth.”
What is encouraging is that the Commission foresees a slight improvement in the composition of GDP but also in investments in a more productive direction. On the GDP, it predicts a greater participation of investments and a decline in the participation of consumption this year, despite the fact that consumption will increase again, at the same rate, as in 2023. This is because it predicts that investments will increase significantly, as the implementation of the Recovery Fund projects will be accelerated and credit conditions will be relaxed. Regarding investments, Brussels notes that their composition will shift from construction to more productive areas, such as mechanical equipment.
However, it also rings a bell for the balance, as it estimates that investment will increase demand for imports of goods and services, reducing the positive contribution of net exports in 2024-2025.