Greece's economy continues to have a favourable outlook in 2024 and 2025, with forecasts predicting faster growth than the Eurozone average in spite of the high levels of uncertainty on a global level, according to the quarterly report issued by Parliamentary Budget Office on Tuesday.
"The Greek economy appears to have developed a resilience, chiefly due to manufacturing and exports, which are emerging as crucial factors for growth, alongside investments and consumption," the report said. The most serious challenges that lie ahead, according to the report, are related to the "investment gap", the climate crisis and the demographic issues caused by declining birth rates.
The head of the budget office Prof. Yiannis Tsoukalas, replying to questions, said that the revenue from fighting tax evasion amounted to 870 million euros. Citing ELSTAT figures showing the the Greek economy continued to grow in the second quarter of 2024, greatly surpassing the Eurozone average, the Budget office said the GDP growth was mainly fuelled by investments, exports and private consumption.
Its revised forecast for annual GDP growth in 2024 was 2.3%, slightly lower than its previous estimate of 2.5% in June, with a favourable outlook and an estimated range between 2.1% and 2.7%. These forecasts are in line with those of international organisations, such as the European Commission, International Monetary Fund and the Bank of Greece.
The Budget Office also commented on the national Medium-term Fiscal Plan, saying that investments in standing and human capital, which increase productivity, were an important factor for long-term growth. In order to achieve this target, the Greek economy must convert its productive model to high value-added sectors that will enhance its international competitiveness, it said.
The report highlighted the important role of manufacturing, noting its recovery in recent years and its heightened productivity, as well as its high contribution (68.1%) to total exports, which also acted as a driver to improve productivity. Another factor contributing to its recovery are investments, especially from the Recovery and Resilience Facility, while salaries in manufacturing were well above the national average.
On a fiscal front, the report highlighted the January-August 2024 primary surplus, which was nearly 4.0 billion euros greater than that of 2023 and amounted to 3.5% of GDP. This was attributed to higher tax revenues due to higher wages and employment levels, more tourism revenue and more electronic transactions.
Regarding inflation, the report noted an increase of 3.2% in the consumer price index in August, up from 3% in July, combined with a reduction in food inflation to 2%, due to measures to enhance competition and a reduction in global raw materials' prices.
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