Warnings on post-RRF GDP
Greek economy seen to lack the momentum able to sustain its current rate of expansion
Indications are growing that despite outperforming the European Union average in terms of growth and public finances, the Greek economy has not developed the momentum that would allow high performance to be achieved in the medium term. On the contrary, forecasts point to a slowdown after the Recovery and Resilience Fund’s resources are exhausted.
On Tuesday the International Monetary Fund published its World Economic Outlook forecasts, according to which Greece’s growth rate will be 2.3% this year (compared to 0.8% in the eurozone), but will decline to 2% in 2025 (against 1.2% in the eurozone) and to 1.2% in 2029.
Although marginally improved compared to the spring forecasts, these estimates show that the IMF is sticking to its pessimistic medium-term assessment. Moreover, a similar forecast was adopted by the Greek Medium-Term Fiscal Structural Program following the estimates of the European Commission, which for 2028 foresees a growth rate of 1.5%.
At the same time as the IMF forecasts were published, the Foundation for Economic and Industrial Research (IOBE) presented its quarterly report on the Greek economy, predicting a rate of 2.3% for this year and an acceleration to 2.4% for 2025. However, as pointed out by its general director, Nikos Vettas, although the forecasts have improved in the short term, this “does not ease our concerns about the medium-term course.”
Vettas actually sounded a warning on three challenges: investments, saying that “there is a need for stronger dynamics of productive investments”; the external balance, the deficit of which has again taken the upward trend, emphasizing that exports and domestic saving must be strengthened; and the fiscal figures, the improvement of which has also been based on inflation, something that may change now that it is decreasing.
During the presentation at IOBE, Vettas was asked about the new production model, and argued that “there is an upgrade, but not a change of the previous economic situation.”
