The European Commission has upgraded its projections for Greek growth this year and next, in line with its upwardly revised gross domestic product projections for the entire European Union.
Brussels said in its spring forecasts on Wednesday that the Greek economy will grow 4.1% this year, against a previous estimate for 3.5%, and jump 6% in 2022, up from 5% previously. The government projections are for a 3.6% GDP advance in 2021 and 6.2% in 2022.
The major upgrade of Greece’s prospects is thanks to the incorporation for the first time in Commission projections of the expected inflows from the Next Generation EU fund, which has also led to a rise in estimates for the entire bloc: Growth is now seen coming to 4.2% in the EU this year, rising to 4.4% in 2022.
Brussels said the NGEU cash constitutes “the backbone” of Greece’s recovery, as the country is now set to witness the highest rate of investment growth among all EU member-states, amounting to 12.9% in 2021 and 15.15% in 2022. Unemployment will remain at 16.3% this year and ease to 16.1% next year.
However, the Commission also sounded some warnings as it recorded the fiscal deterioration in the Greek economy due to the pandemic and the support measures.