ECONOMY

Greek GDP bouncing back

Next year seen as pivotal as economic seeks move from recovery to real growth

greek-gdp-bouncing-back

The impressive economic recovery recorded in the third quarter, demonstrated by the data of the Hellenic Statistical Authority, reflected a gross domestic product increase of 13.7% compared to the same period last year, while on a quarterly basis it was up 2.7%.

Next year is seen as pivotal for the economy, according to analysts, as it will be called upon to move from a stage of recovery to one of real growth, guided by investment and exports, so that it lasts.

Finance Minister Christos Staikouras said that after the results of the third quarter, the growth rate over the nine-month period stands at 9.3%.

Against this backdrop, the forecasts for the whole year are significantly improved and far exceed the 6.9% seen in the government budget estimate. 

Some forecasts now point to a growth rate of 8.2% and 4.4% for 2022, while some are even looking at possible double digits.

In another positive, the 13.7% increase in the third quarter placed Greece first among EU countries, where the average is at 3.9%, with the data available so far.

With these numbers, the distance that the economy must now traverse to cover the losses of 2020 is small.

GDP over the first nine months of this year was 135.9 billion euros, compared to 137.5 billion euros in the same period of 2019, according to National Bank of Greece chief economist Nikos Manginas.

“In the first half of 2022 we will have a return to 2019,” he said.

Many factors played a role in this good third-quarter performance, although the driving force was consumption, with the help of tourism and state aid, which, of course, translates into a primary deficit of 7% of GDP.

More specifically, final consumption expenditure increased by 7.3%, compared to the same period last year, with that of households growing by 8.6% and general government by 5.7%.

For their part, exports of goods and services increased by 48.6% – with a significant contribution from tourism, as exports of services increased by 84.6%. 

Imports also increased by 21.7%, in a development that raises the alarm for the balance sheet. 

Investments, meaning gross fixed capital formation, increased by 18.1%.