The European Commission is forecasting strong growth rates of 7.1 pct in 2021 and 5.2 pct in 2022 for Greece in its autumn economic forecasts, published on Thursday, revising its forecasts for 2021 upwards compared to those published in July (4.3 pct) and slightly downwards for 2022 (from 6 pct).
“The recovery of the Greek economy is gaining traction, primarily driven by domestic demand and the better-than-expected tourist season,” the report said. “The impact of the pandemic is expected to gradually soften, while the accommodative fiscal and monetary policy, coupled with the strong boost from the Recovery and Resilience Plan, are set to sustain the momentum going forward.”
The rmergency support measures are being adapted to the evolving needs of the economy, and expected to be largely phased out by the end of 2021, supporting the reduction of the general government deficit, it added.
The report said that the recovery of the economy gained momentum in 2021, as Greece’s economy rebounded strongly in the second quarter of 2021, by 3.4 pct compared with the previous quarter. Real GDP reached its pre-pandemic level in the second quarter of 2021.
“The recovery was driven by domestic demand, in particular investment, and by the accumulation of inventories, while the ongoing fiscal stimulus provided a crucial role in supporting the economy,” it said.