The Greek economy’s strong and weak points
What are the advantageous aspects of the economy and where are the main problems
The Greek economy’s growth rate as well as the increase in investments and exports are currently the country’s strongest points, compared to the rest of the eurozone, as shown in the statistical tables of the Commission’s spring forecasts, published on Wednesday.
On the contrary, the weak data, with performances that rank Greece among the last places and sound the alarm for the future, include the trade balance deficit, savings, and of course the public debt, as well as the demographics.
As the report also states, the economic recovery after the pandemic has been strong and the pace remains more than double the European Union average, with a forecast of 2.2% this year compared to 0.8% in the eurozone, which places Greece in the eighth highest position. It is, however, lower than the recent government forecast of the Stability Program for 2.5% and significantly lower than the budget forecast (2.9%).
Correspondingly, for investments, an increase of 6.7% is predicted by the Commission in 2024, which is the second highest in the eurozone. This is predicted to achieve an average increase of 0.1%. The government, being more optimistic, estimates a rate of 9.1% (against its previous forecast in the budget for 15.1%). However, despite the acceleration, the percentage of Greek investments in GDP reaches 14% and is much lower than the 22% average of the eurozone.
The strongest elements of the economy include the fiscal sector. With a forecast primary surplus of 2.3% of GDP, Greece ranks third best in the eurozone (after Cyprus and Denmark) which on average has a primary deficit of 1.9%.
This fiscal discipline has certainly come as a result of the need to deal with perhaps the greatest weakness of the Greek economy, its public debt. With the Commission’s estimate of public debt at 153.9% of GDP, Greece always ranks first in the eurozone, where the average public debt is 90% of GDP.
Another source of concern is the other part of the twin deficits that led to the crisis, the external deficit.
