FINANCE

Import costs set to affect GDP course

import-costs-set-to-affect-gdp-course

The Finance Ministry is counting the cost of rate hikes in energy and other commodities on state finances, currently projecting losses of 400-500 million euros per month on the trade balance – a sum that has a negative effect on growth.

Inflation is mainly fanned by fuel hikes, as imports expand the trade deficit. That has not yet been reflected on gross domestic product, thanks to consumption, tourism and investments that support this year’s growth and will likely take it above 8%.

The ministry’s attention is focused, therefore, on 2022, a crucial year in many respects, but the sector indexes of inflation are already showing an expansion of price hikes to more sectors than just energy, with the food sector already posting a 4% jump.

Against that background Greece needs a strong growth rate next year that would support the state budget and contain the primary deficits create this and last year. The ministry also wants the GDP to approach €190 million so as to improve the debt-to-GDP ratio, which exceeded 200% last year.

Strong growth, reducing the primary deficit and improving the debt-to-GDP ratio are the three main objectives for 2022.