The European Commission has upwardly revised its growth forecast for Greece this year to 4.3%, from 4.1% previously, according to its summer estimates published on Wednesday, while sticking to its projection for a 6% expansion next year.
The Commission report says that the fiscal measures Athens took earlier this year and the boost from the Recovery and Resilience Facility resources are expected to strengthen domestic demand that will be the main growth driver in both 2021 and 2022.
It further noted that Greece posted real GDP growth of 4.4% in the first quarter of the year on a quarterly basis, despite the restrictions imposed from January. That performance is mainly attributed to net exports, thanks to the strong rebound of service exports and the significant contribution of stocks, the report stated. On the other hand, private consumption shrank 1.3% on a quarterly basis, while a scheduled property tax increase for 2022 has boosted the construction sector, it said.
Unemployment is set to ease marginally from the 16.3% level of 2020, while inflation will remain negative this year (at -0.4%) before reverting to positive territory (+0.5%) next year.