ATHENS – Spurred by record-level arrivals of tourists, who are spending big, Greece’s economic rebound from the waning COVID-19 pandemic is springing toward 6 percent growth in 2022.
That was the estimate of the influential think tank IOBE, said Reuters, even more optimistic than the Finance Ministry’s expectations of some 5.3 percent, still not enough, the government said, to reduce a 24 percent Value Added Tax on food.
In July, IOBE put the growth at 3.5-4 percent but tourists poured in through the summer and they are still coming in big numbers in October, Greece, expected to bring a boost of as much as 20 billion euros ($19.44 billion.)
“Greece’s economy is expanding faster than expected this year and by more than the EU average,” IOBE head Nikos Vettas said. “But the horizon abroad is turning heavy,” he said, worrying whether it can be sustained.
He said the country’s economy was also helped by growing exports and that tourism revenue more than doubled in the first half, up 147 percent year-on-year after two years of lockdowns, despite high inflation.
IOBE expects the increase in consumer spending driving growth this year to show fatigue in 2023 as a result of higher borrowing costs, projecting expansion will slow to 1.6 percent then, below the government estimate of 2.1 percent.
“Certainly, there will be a slowing of our economy as the cost of borrowing increases. The international crisis is not something that will end easily. Europe is at the brink of recession,” Vettas said, the news agency reported.