Greece flag Greece: Economic outline

Economic Outline

Economic Indicators

Due to Greece's heavy reliance on tourism and the hospitality industry, the country was among the most severely hit by the Covid-19-induced crisis. However, the Greek economy rebounded strongly and GDP reached its pre-pandemic level already in the second half of 2021. In 2023, the overall growth was estimated at 2.5% (from 5.9% one year earlier – IMF), driven primarily by consumption and net exports, while also being supported by the implementation of the Recovery and Resilience Plan (RRP) and a resilient labour market. As the post-pandemic recovery loses momentum, economic activity is poised to slow down. Nevertheless, it is anticipated that GDP growth will persist above the long-term growth potential throughout the forecast horizon, at 2% this year and 1.4% in 2025 according to the IMF (2.3% and 2.2%, respectively, as per the EU Commission). The pace of private consumption growth is expected to decelerate as pent-up demand diminishes; however, it is anticipated to stay robust due to wage growth.


The estimate for 2023 indicates that the general government deficit was relatively stable, at 1.8% of GDP. This headline balance was influenced by an enhanced primary balance, attributed mainly to the gradual discontinuation of measures aimed at mitigating the economic and social repercussions of elevated energy prices. Additionally, better-than-anticipated tax revenues, notably from value-added tax and social security contributions, contributed to this improvement. However, the positive impact was partially counteracted by heightened expenses associated with the adverse effects of recent natural disasters (i.e. Thessaly floods), with increased interest expenditure also playing a role in offsetting the overall improvement in the primary balance. In 2024, the general government deficit is forecast to decrease to 1.1% of GDP. The public debt-to-GDP ratio - at 168% of GDP in 2023 - is set to decline throughout the forecast horizon, largely driven by the increase in nominal GDP, but also helped by primary surpluses. The ratio is expected to decline to 160.2% in 2024 and to 155.7% in 2025 (IMF). Headline inflation for 2023 averaged 4.1% and should remain above 2% in the foreseeable future. The aftermath of recent floods in the Thessaly region, a significant area for agricultural production, is influencing food prices, while the foreseen robust wage growth linked to a constrained labour market is poised to exert upward pressure on prices in the long term.

During 2023, indications of labour shortages emerged in key sectors such as construction and services. As nominal wages were on the ascent and inflation decelerated, the real compensation of employees shifted into positive territory in 2023, rebounding from the contraction experienced one year earlier. For the year as a whole,the  unemployment rate was estimated at 10.8% by the IMF, and is set to decelerate to 9.3% this year and 8% in 2025, its lowest level in over a decade. According to the latest data by Eurostat, Greece has a GDP per capita of less than 40% below the EU average (estimated at USD 39,864 in 2023 by the IMF – PPP).

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 217.75238.28250.28260.45270.03
GDP (Constant Prices, Annual % Change) 5.62.02.01.91.7
GDP per Capita (USD) 20,81822,80523,96624,95325,910
General Government Balance (in % of GDP) -1.8-1.6-1.2-1.2-1.3
General Government Gross Debt (in % of GDP) 179.5168.8158.8152.0148.1
Inflation Rate (%) 9.34.22.72.12.0
Unemployment Rate (% of the Labour Force) 12.410.99.48.78.4
Current Account (billions USD) -23.39-16.54-16.34-13.87-12.08
Current Account (in % of GDP) -10.7-6.9-6.5-5.3-4.5

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Euro (EUR) - Average Annual Exchange Rate For 1 GHS 0.240.200.180.170.16

Source: World Bank, 2015

 

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Latest Update: June 2024