High growth seen continuing next year

International rating agencies expect the Greek economy to sustain its high growth rates – above 3% – in 2022 and the following year, given the 16.2% annual leap Greece’s gross domestic product recorded in the second quarter of 2021 and tourism’s strong showing in Q3, as well as the EU resources anticipated.

Alex Muscatelli, Sovereign Group director at Fitch, tells Kathimerini: “We expect the recovery in the Greek economy to continue in 2022 with the deployment of the Next Generation EU funds gathering pace and providing an uplift to real spending over the course of the whole year. And we expect above-trend growth of 3.5% in 2023, implying that we assume that there will still be spare capacity in the Greek economy.”

“Faster growth may lead us to revise this view; we will review our forecasts for this and the following years at the end of the month shortly after the publication of Fitch’s next Global Economic Outlook,” he adds.

Steffen Dyck, vice president and senior credit officer at Moody’s, wonders “how the strong performance in Q2 will affect the 2022 growth, which we currently see at around 6%. If 2021 growth turns out to come in close to 6% or 7%, 2022 could be around 4% to 5%,” he estimates.

Dennis Shen, an economist and director at Scope Ratings, sees growth of around 3.5% in 2022. “Afterwards, elevated growth of an average of around 1.7% over 2023-26 might appear on the cards, above an estimate of the long-run potential real rate of growth of around 1%, the latter still restricted by working-age population contraction of 0.7% per year over 2021-26,” he says.

“In elevated rates of economic growth over this 2021-26 medium-run horizon, we account for the significant scale of EU funding, exceeding cumulative Greek public investment of the past five years, and a sturdy record in EU fund absorption, with Greece having ranked second among the EU-27 in absorption rate of cohesion funds over a 2014-20 EU multiannual budget phase,” he adds.

Marko Mrsnik is far more bullish for next year: The senior director in the European Sovereign Ratings Group at S&P Global Ratings, says, “We expect a strong performance also in the second half of this year, with the current growth forecast of 6.3% in 2022, revised up from 5.8% previously.”