Economy back to 2009 in four years’ time

The Medium-Term Plan 2025-2028 the National Economy and Finance Ministry presented on Monday foresees a return to the years before the bailouts in terms of basic fiscal figures, such as debt, but also macroeconomic ones, such as GDP.

Nearly 20 years of streamlining, junk-rated bonds and dramatic income cuts have apparently taken the economy back to nearly where it was before it entered bankruptcy.

Comparing the year before the country’s entry into the memorandums, 2009, with the final year of the Medium-Term Plan, 2028, puts things into perspective in terms of the successes and failures of the period.

Debt in 2009 was 301 billion euros or 126.7% of GDP. In 2023 it was €356 billion or 161.9% of GDP (with a better profile, of course, after its adjustments). This year it is projected to be 153.7% of GDP, and according to the Medium-Term Plan it will decline to 133.4% of GDP in 2028. That is, it will be close to, if still slightly above, 2009.

GDP at current prices in 2009 was €237 billion, sank to €175 billion in 2016 (and again in 2020 due to the pandemic to €165 billion) and recovered to €220 billion in 2023. The Medium-Term Plan begins with an estimate for GDP of €232 billion this year to rise to €242 billion in 2025, to €253 billion in 2026, and eventually to €272 billion in 2028.

Unemployment 15 years ago was at 10.4%. It peaked in 2015, at one point reaching 27%. This year, on average, it is projected to land right at the memorandum level, at 10.5%, then to fall to 9.7% in 2025, 9.2% in 2026, 8.7% in 2027, and 8.5% in 2028.

Investments in 2009 were around 20% of GDP, close to the EU average. Then came the collapse. The plan predicts investments will increase from 14.3% of GDP in 2023 to 17% of GDP. However, they will still remain lower than the 22% of GDP which is the EU average.

The current account deficit was €29 billion in 2009, after peaking at €36 billion or 15.5% of GDP the previous two years. It decreased to almost €1.3 billion in 2014, but rebounded in 2020 due to the pandemic and energy crisis, and fell to €13.9 billion in 2023, or 6.4% of GDP.

The Medium-Term Plan forecasts that exports will be a driver of growth growing by 4.2% on average in 2027-28.