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Greece Economic growth will remain robust, with real GDP projected to increase by 2.2% in 2023 and 1.9% in 2024. Consumption growth is projected to slow in the near term following the erosion by high inflation of households’ purchasing power. Real investment growth is projected to remain strong in the face of rising borrowing costs as spending related to Recovery and Resilience Funds increases. Headline inflation has been moderating since September 2022 but has become more broad-based with continuing labour shortages contributing to wage growth. Energy price subsidies are gradually being reduced as energy prices recede. Achieving and maintaining the planned return to a primary surplus will help Greece manage inflationary pressures and reach an investmentgrade sovereign debt rating. Further increases in labour market participation especially among women and youth would improve equality of outcomes and help address labour shortages. Greece’s economic growth remains robust in the face of headwinds Greece’s economy has continued to grow robustly in spite of headwinds. Investment growth remained strong in 2022Q4 despite rising investment costs and growing labour shortages. Business confidence rose from October 2022 to be near its pre-pandemic highs in April, while purchasing managers’ expectations in April pointed towards expanding demand. Real consumption continued to grow in 2022Q4 and early 2023, reflecting strong employment growth, and despite households’ falling purchasing power and low consumer confidence. Job creation has slowed in 2023, however, as the economy hits capacity constraints. The harmonised headline inflation rate abated to 4.5% year-on-year in April as energy prices declined, while broadening price pressures raised annual core inflation to 6.1%. Wage rates have accelerated, and in April 2023 the minimum wage has been increased by 9.4%, following increases of about 10% in the first half of 2022.
Greece
1. Business confidence is an unweighted average of confidence indicators in industry, construction, retail trade and services. 2. National CPI decomposition by energy, food and core inflation. Source: Eurostat; and OECD Consumer Prices database. StatLink 2 https://stat.link/imceyj
OECD ECONOMIC OUTLOOK, VOLUME 2023 ISSUE 1: PRELIMINARY VERSION © OECD 2023