Greece recorded a 7% annual growth rate in the year’s first quarter, the Hellenic Statistical Authority (ELSTAT) announced on Tuesday, offering some unexpected good news to the government and analysts that improves the prospects of the country’s gross domestic product for the entire year.
This 7% rate is partly explained by the comparison with the January-March 2021 quarter, when the economy was still in recession, as GDP had contracted 1.7% year-on-year then. Nevertheless the Greek economy outperformed the eurozone (5.1%) and the European Union (5.7%), according to Eurostat figures. On a quarterly basis Greek GDP expanded 2.3% from October-December 2021.
The main driver of that significant rebound was household consumption, which increased by 11.6% year-on-year; this is quite a remarkable rate during a period of high inflation, although the comparison is with a quarter of reduced consumption. Analysts argue that this is also attributed to savings and the state support that continued. Even general government consumption was increased by 1.9%, although the comparison is with a period with lockdowns and costly support measures.
Investments were also increased in January-March 2022: Gross fixed capital formation expanded 12.7% over a quarter (January-March 2021) when investments had grown 14.4%. Exports also fared well, increasing 9.6% while imports soared 17.5% on an annual basis, sending the current account deficit higher.
The new figures will make domestic and foreign analysts revise their estimates for the year’s growth upward, including Finance Minister Christos Staikouras: ”This performance signals a dynamic start for the course of GDP throughout the year, paving the way for higher-than-expected growth,” he said. His ministry has estimated a rate of 3.1% for the entire 2022.
Foreign economists and rating agencies noted to Kathimerini that they will now have to revise their projections for 2022 to between 4% and 5.5%.