Parliament Budget Office: Greek economy to grow by 2.2% in 2023, 2024

The Greek Parliament’s Budget Office Greek on Tuesday forecast that the country’s economy will grow by 2.2 percent this year and next year, in 2024.

A relevant report stated that the economy grew by 2.1 percent in the first quarter of 2023, compared with a 7.8-percent growth rate in the corresponding quarter of 2022, a slowdown judged as a return to normal growth following markets’ opening after the pandemic.

Under a base scenario, the inflation rate is expected to ease to 4.6 percent in 2023, and 2.3 percent in 2024, although the core inflation will remain more resistant.

The current account deficit decreased by roughly three billion euros in the January-April 2023 period, to level off at 5.6 billion euros, but it remained up from 4.9 billion euros in the corresponding period last year. The unemployment rate was recorded at 10.8 percent in May 2023, down from 12.7 percent in May 2022. Employment was higher, by 1.1 percent, while nominal wages were up 5.5 percent in the first quarter of this year.

The report said the fiscal performance in the January-April 2023 period showed an improvement of 2.5 billion euros compared with the same period last year, reflecting higher tax revenue.

The yield of the 10-year Greek state bond fell significantly over the last few months, with the yield spread down 40 basis points from the 10-year Italian bond, and up 35 bps from Spanish bonds.

The report cites a significant fiscal impact from lower inflation this year, although this will slow the growth rate in terms of tax revenue, especially VAT remittances.

The Parliament Budget Office said a lifting of uncertainty and a return to normality was a precondition to accelerate recovery and restore an investment grade rating for Greek debt.