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Economy

Despite COVID, Energy Crisis, Greece On Track for Big Growth

September 13, 2022

ATHENS – What’s expected to be another record tourism year despite the waning COVID-19 pandemic is fueling enough economic growth in Greece even to withstand pouring state aid into helping households deal with soaring energy costs, bank chiefs said.

Estimates have been that growth will exceed 5 percent of the Gross Domestic Product (GDP) of 197.2 billion euros ($200.3 billion,) after an impressive 7.7 showing for the second quarter of 2022.

Even record inflation that’s cutting into the purchasing power of Greeks and scaling back supermarket sales isn’t having a significant deterrent effect on the economy coming back, said Kathimerini.

The chief Eurobank Fokion Karavias and Piraeus Bank Christos Megalou however said there shouldn’t be any relaxation of trying to accelerate a recovery and that fiscal restraint is needed.

But Prime Minister Kyriakos Mitsotakis said he would give 5.5 billion euros ($5.41 billion) in handouts ahead of the 2023 elections, but backed away from a pledge to consider reducing the 24 percent Value Added Tax (VAT) on food.

It’s a balancing act to reach out to voters but keep the state coffers in line and try to get Greece back to market status with ratings agencies to help lure more Foreign Direct Investment (FDI.)

Karvias said the second quarter growth “in a deteriorating international environment was a surprise, exceeding all expectations and confirming the dynamic recovery after the pandemic,” the paper reported.

The reasons, said Megalou, were “strong domestic demand and the course of tourism,” factors which, he notes, “are expected to continue bolstering growth in the third quarter.”

He added that, “The dynamic of these two factors was reflected in the very strong growth of the second quarter … as well as in the upward revision of the GDP in the first quarter from 7 percent to 8 percent.”

He said that, “Despite the expected slowdown in the fourth quarter, we consider the possibility of growth exceeding the level of 5.8 percent, which is our forecast at Piraeus Bank for the whole of 2022, to be significant.”

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ATHENS - Almost nine years after being on the brink of being pushed out of the Eurozone and its economy shrinking 25 percent, Greece’s unlikely comeback is continuing, with a 3 percent growth forecast for 2024.

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