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Economy

Greece’s Accelerating Recovery Seen Hitting 2023 Speed Bump

ATHENS – With tourism even during the waning COVID-19 pandemic propelling a rebound set to bring growth of 5.3 percent in 2022, rising energy costs and soaring inflation will put the brakes on in 2023.

Domestic demand is also seen slowing because households are trying to deal with electric bills, winter energy supplies and supermarket prices that have gone up so much that food stores said they will try to limit those on 50 core products.

The growth for 2023, said Reuters in a report, is expected to be only about 2.1 percent, according to the New Democracy government’s 2023 budget estimates that affect a crucial election year.

In 2022, Greece is expected to achieve a 0.7 percent of Gross Domestic Product (GDP) primary surplus – which excludes interest on debt, the cost of running municipalities, state enterprises and some military expenditures – from a 1.7 percent budget deficit in 2022, showing a rosier picture being developed.

The primary surplus target for 2023 is achievable even in a more unfavorable scenario “due to the resilience of public revenues and the margin of fiscal restraint”, National Bank’s Senior Economist Nikos Magginas told the news agency.

“The 2023 budget is being drafted under conditions of extremely high uncertainty, regarding geopolitical developments at a global level,” Finance Minister Christos Staikouras and Deputy Finance Minister Theodore Skylakakis said in a statement, referring to the effect of Russia’s invasion of Ukraine that spiked energy costs.

The country’s debt, the highest in 19-member Eurozone, is seen falling to 161.6 percent of GDP from 169.1 percent in 2022, the draft estimate indicated.

The draft budget forecast annual inflation will ease to 3 percent by the end of 2023, from 8.8 percent this year, the highest in almost 30 years, while joblessness is seen dropping slightly to 12.6 percent from 12.9 percent.

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