What real income will look like for Greeks in 2024
Almost seven in 10 contributors to the Greek Panel of Economists – an initiative of the Scientific Council of the Center for Liberal Studies (KEFiM) that aims to record and present the views of top Greek economists regarding critical matters related to the national economy – are optimistic that the real average income of Greeks will increase in 2024, as long as the prescribed economic policy is implemented in the way that it is described in the national budget.
Even though the national economy’s prospects for growth in the new year are positive, inflation and subsequent price increases are diminishing citizens’ real income.
At the same time, economic, geopolitical and technological changes are creating opportunities, but also challenges, overturning established practices, plans and economic options.
As a result, the basic prerequisite for a substantial improvement of the economic situation is the nominal increase of income, at a rate that exceeds rising living costs; a significant challenge of policy not only in our country, but also in the rest of Europe.
In December, 19 Greeks responded to the Panel’s question. Of them, 69% expect an increase of real average income in 2024, while half of the remaining 31% believe otherwise, and the other half are unsure.
In their comments, which are publicly accessible on the KEFiM website, the contributors to the Greek Panel of Economists emphasize the uncertainty which characterizes the international economic and political climate.
They point out that these estimations have been formulated under the assumption that unlike what had happened in the previous years, this year we will not experience a sudden external disturbance – as two wars continue to rage in close proximity to Greece.
As far as it can be estimated, it has been argued that the country’s GDP will increase significantly in 2024, but this growth will concern capital-intensive sectors, so a significant part of the growth will return to these funds.
The contributors to the Greek Panel of Economists emphasize the uncertainty which characterizes the international economic and political climate
This condition, combined with the observed increase in tax collection, leads to the conclusion that real disposable income is, logically, going to increase, even if it remains extremely hard to determine by how much exactly.
It should also be noted that a prerequisite for the increase of average disposal income will be the increase of productivity, which in turn would require investments and digitization, which have been predicted to increase in 2024, aided by the European Union’s Recovery Fund.
In any case, to a large extent, the Greek economy continues to depend on international tourism trends, as work productivity remains low compared to other European nations, a weakness which is not made up for by the fact that Greek men and women work for more hours than other Europeans.
Finally, a permanent proviso in regard to macroeconomics has to be established: The increase of an economic indicator, such as real average income, is a fairly safe gauge regarding the overall course of the national economy; such an indicator, especially when its shift is marginal, does not on its own reveal, for example, how much certain business sectors or social groups will see their real income move against general trends and actually diminish, as opposed to go up.
However, the beginning of a new year dictates optimism and confidence.
Giorgos Archontas is a member of the Scientific Council of the Center for Liberal Studies (KEFiM) and head of study programs for the Greek Panel of Economists.
The Panel is contributed to by 75 economists representing 59 universities across 11 countries. The list of contributors, their answers to monthly questions and their explanatory commentary, as well as answers to frequently asked questions, can be accessed on the website of the Center for Liberal Studies (kefim.org).
