ATHENS – Moving attention from the COVID-19 pandemic to pushing faster recovery of the economy, Greece's New Democracy government expects growth to be down 4.5 percent in 2022, on the back of growing foreign investments and tourism.
That's less than the 6.1 percent expected for 2021 with hopes that the pandemic will end in 2022 although it's lingering longer than expected because of a rabid anti-vaxxer movement and people defying what's left of health measures.
That's far better than expected after lockdowns of non-essential businesses in 2020 that spilled over in 2021 shuttered many for six months or more and put people out of work, supported by state subsidies.
Investment alone is expected to rise 11.1 percent, said the financial news agency Bloomberg, doubling in 2022 as luxury resorts and hotels and other businesses smell a comeback for Greece's economy, along with the burgeoning 8-billion euro ($9.28 billion) development of the abandoned Hellenikon international airport on Athens' southern coast.
“Real GDP (Gross Domestic Product) is expected to increase by 4.5 percent in 2022 compared to 2021, driven by the steady growth rate of private consumption, the significant boost of investment by 23.4 percent and the further recovery of exports of services by 21 percent, amid rising foreign tourism,” a budget draft said, the report added.
Public debt is expected fall to 190.4 percent of GDP – a level that New Democracy while out of power said was unsustainable – but down from 205.6 percent in 2020, Greece owing almost twice what it takes in annually in revenues.
Three international bailouts of 326 billion euros ($378.27 billion) that began in 2010 and ended on Aug. 20, 2018 have failed to slow the country's soaring debt that grows by the second, and the loans repayments extending for decades.
Prime Minister Kyriakos Mitsotakis told a Cabinet meeting economic output would surpass pre-pandemic levels in 2022 although a continued high level of public spending on pandemic relief measures will further increase the annual budget deficit to an estimated 10 percent.
“The economy has already recovered more than two-thirds of the lost Gross Domestic Product in one year, even though economic activity still faced restrictive measures in the first half,” Finance Minister Christos Staikouras said, reported Reuters.
Fitch Ratings said Greece’s stronger-than-expected economic performance in the first half led it to upwardly revise its full-year 2021 GDP growth forecast to 6 percent, coming back fast in the second quarter even before tourists arrived.
“It seems that regaining the pre-pandemic GDP will take place sooner than expected, in the first half of 2022,” the National Bank’s Chief Economist Nikos Magginas told the news agency.