Upward revision of outlook

The Foundation for Economic and Industrial Research (IOBE) has upwardly revised its forecast for Greece’s growth in 2023 to 2.4%, from 1.4% three months ago, following a general trend after statistical agency ELSTAT’s positive data for a growth rate of 5.9% in 2022. The government predicts a rate of 2.3%, while the International Monetary Fund also revised its forecast upward to 2.6% on Tuesday.

However, the general director of IOBE, Professor Nikos Vettas, while presenting the institution’s quarterly report earlier this week, left no room for complacency and warned that it is an illusion to consider that the Greek economy is on autopilot, and that the high rate of growth, investment and unemployment reduction could allow for the distribution of benefits, as in the previous two years. “Despite the progress made since 2010,” he said, “structurally, we are one of the poorest countries and the steps must become leaps and bounds if we want convergence with Europe’s wages.”

The IOBE report projects private consumption to grow by 1.3% in 2023 versus 7.9% in 2022 and gross fixed investment by 10% versus 11.6% in 2022. Exports are seen increasing 3.2% versus 4.9% in 2022, with imports down 2.6% from 10.9% in 2022. Inflation is forecast to ease to 4.3% from 9.6% in 2022 and unemployment to 11% from 12.4% in 2022.

The report notes that 2022 saw the strongest drop in unemployment since 2014, by 2.3 percentage points to 12.4%.

In its World Economic Outlook, the IMF predicted a growth rate of 2.6% for this year, against its previous forecast of 1.8%. For 2024, it predicts a growth rate of 1.5%, compared to a previous forecast of 1.4%.

The Fund also sees inflation falling to 4% this year (versus a forecast of 3.2% in the fall) and to 2.9% in 2024. The current account deficit is projected to decline to 8% of GDP – from 9.7% in 2022 – and to 6% in 2024. Unemployment is estimated to fall to 11.2% this year and 10.4% in 2024.