The company improved its growth forecasts and inflation V Hellas V European Commission in his winter report amid a broader assessment that the EU economy will avoid a recession and that “peak inflation is behind us.”
The report notes that the Recovery Fund and government support measures have stimulated the economy, limiting the negative effects of the energy crisis, and the government has responded with satisfaction to the preparations for the elections and the announcement of new measures. The forecasts “confirm the strong resilience and positive outlook for the Greek economy,” Finance Minister Christos Staikouras said.

However, the Commission remains reserved and more pessimistic than the government about growth rates. In particular, he predicts GDP growth this year at 1.2% against the previous forecast in the fall of 1%, as well as against the government’s forecast of 1.8%. In 2024, the growth rate is forecast to be 2.2% against the previous forecast of 2%. For 2022, it cut its forecast to 5.5% from 6% in the fall and against the government’s 5.6%, according to ELSTAT, apparently taking into account poor results in the third quarter.

Greece’s performance remains better than Europe’s in terms of development, as GDP in the European Union is projected to increase by 0.8% this year and in the Eurozone by 0.9%. For 2022, the growth rate is estimated in both regions at 3.5%.
Growth in Greece this year will be supported by increased consumption thanks to lower inflation, as well as increased investment thanks to the Recovery Fund, the report notes. The commission speaks of the “timely and effective implementation” of the National Recovery Plan, which will drive investment spending, offsetting the weakening of private investment due to tightening financial conditions. Tourism receipts are projected to increase this year and in 2024, with exports picking up from 2024 as the external environment improves from the end of this year. However, it is noted that risks for tourism remain due to possible geopolitical tensions.

On inflation, her forecasts are more optimistic than those of the government, but she rings the bell for persistent food inflation, while noting that she hasn’t accounted for the potential impact of a minimum wage hike. This year, he lowered the bar to 4.5% against the previous forecast of 6% and against the government’s forecast of 5%. In fact, this is well below the forecast of 6.4% in the Eurozone. For 2024, he sees a drop to 2.4%, as he estimated in the fall. It estimates that it will close with inflation of 9.3% in 2022, compared to the previous fall estimate of 10% and the government’s forecast of 9.7%.

Energy prices are the ‘key’ to the index’s decline, while instead ‘food inflation is expected to be more resilient’, given the lag in which high energy prices have reflected on food production costs.