Greek economic growth to remain broadly stable in 2024, 2025

Greece’s economic growth is expected to remain broadly stable at 2.3% in 2024 and 2025, broadly as expected in autumn, the European Commission said in its Winter 2024 Economic Forecast published Thursday.

Real consumption is set to expand at similar rates as last year, resulting in a slightly lower contribution to real GDP growth. 

Investment is expected to pick up sizeably as the country’s Recovery and Resilience Plan gains speed, and as financing conditions ease. The composition of gross fixed capital formation is projected to shift from construction to more productive investments such as equipment and machinery. 

However, investments are likely to induce higher import demand for both goods and services, which is projected to reduce the positive contribution of net exports in 2024-25, the report said.

At the same time, HICP inflation is expected to decline more gradually in 2024 and 2025, to 2.7% and 2% respectively. This is marginally lower than in the autumn forecast in both years.

For 2023, Greece’s real GDP is estimated to have grown by 2.2%, slightly lower than in the autumn forecast. Following the strong recovery in 2022, consumption growth decreased substantially but remained one of the main growth drivers last year. 

Despite tightening financing conditions, investment made a significant contribution, thanks to strong construction activity and the implementation of the Recovery and Resilience Plan. 

“The slower than expected recovery of Greece’s key EU trade partners weighed on export growth, still net exports had a positive contribution to growth,” the Commission says.