Optimism builds for course of Greek economy after GDP growth in Q2 2021 reaches 16.2% (yoy)

The Greek economy’s stellar performance in the second quarter of the year raised hopes among the government’s economic team that 2021 will not merely comprise a post-pandemic rebound but, instead, rank among the EU’s top performers in the coming period.

In commenting on the performance, an eyebrow-raising 16.2-percent GDP increase in Q2, compared to the same period in 2020, Greek FinMin Christos Staikouras admitted that his ministry had forecast a recovery of between 12 to 14 percent. The government had also stuck to its conservative forecast of a 4-percent GDP hike overall for 2021, less than what international ratings firms projected, i.e. between 5.5 to 6 percent.

Greek banks, conversely, were more optimistic than the government in their forecasts for the second quarter, mostly on the back of increased consumption.  It was that parameter, namely, household and business consumption – both domestic and imported – that comprised 70 percent of the performance for Q2. Retail spending increased and travel remittances were brisk for the quarter, after the effects of a lockdown in previous months.

Beyond consumption, analysts said 30 percent of the 16.2-percent hike is due to higher exports, manufacturing and investments, especially in the construction sector.