ECONOMY

Fear not for construction

Despite certain apprehensive forecasts, the Greek construction and tourism sectors have significant growth prospects, according to studies presented yesterday. Speaking at an event at the Athens Chamber of Commerce and Industry yesterday, research director of the Foundation for Economic and Industrial Research (IOBE) Theodoros Palaskas said the construction sector will not fall into recession after the Olympics, as predicted by some, but will continue expanding, albeit at slower rates. A study by Global Insight projects the domestic construction sector to grow at an average annual rate of 5.9 percent until 2012, reaching a value of $37.4 billion, from $21 billion in 2002. Demand for real estate is expected to grow even faster, at 6.4 percent annually, reaching a value of $12.8 billion in 2012, from $6.9 billion in 2002. Such high growth rates are attributed to projected low mortgage rates and Greeks’ high propensity to buy property. Regarding tourism, Palaskas said it accounts for a larger share of the country’s gross domestic product (GDP) than any other sector and has significant growth prospects. In 2001, its share of GDP was 16.7 percent, it employed 19.7 percent of the work force and its foreign exchange earnings represented 56 percent of those from exports. Spending on advertising promotion, which is an important parameter in the supply of tourism services, represented just 18.7 percent of the budget of the country’s national tourism organization, against 35.7 percent of Italy’s and 83.7 percent of Portugal’s respective agencies.