The Greek economy is expected to grow by 1% in 2023

Greece’s economy will remain in the black next year, but growth will slow to 1% from 6% this year, according to the European Commission’s autumn forecast released on Friday. It should still avoid the recession that threatens several other countries in the euro zone.

Brussels’ projection for next year is significantly lower than the government’s 2.1%, while also including a persistent inflation rate of 6%, compared to the government’s estimate of 3%. This is even better than the average euro zone growth of 0.3% and inflation of 6.1% (7% for the whole of the European Union).

Towards the end of 2023, growth is expected to accelerate, while in 2024 it will reach 2%. A loss of income is also expected, as nominal wages will rise less than inflation. The main risk highlighted is the possible burden on tourism of the decline in household incomes in the countries of origin of visitors.

The Commission also forecasts that Greece will return to primary surpluses in 2023 as well as a sharp reduction in debt, even if the support it has provided to households and businesses in the face of the energy crisis, which was not targeted, was among the highest in Europe at 2.3% of GDP, as Economy Commissioner Paolo Gentiloni reminded us. A primary surplus of 1.1% of GDP is forecast, higher than the 0.7% forecast in the draft budget, while for 2024 it should reach 2.2% of GDP. At the same time, the debt will fall to 161.9% of GDP in 2023 (from 171.1% this year) and will plunge again to 156.9% of GDP in 2024. The draft budget forecast a debt of 169 .1% of GDP this year and 161.6% in 2023, so it is almost identical to the Commission.

“Today’s EU forecast certifies that amid the most intense energy crisis and inflationary pressures in decades, the Greek economy is growing steadily and strongly, showing remarkable resilience. in the years to come”, commented the Minister of Finance Christos Staikouras.

The government is now expected to adjust its forecasts to bring them closer to those of the Commission in the final draft budget that the Ministry of Finance will submit to Parliament over the next 10 days.

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