Greece is expected to be the growth leader this year, notes Wood, who believes Greece’s GDP growth will reach 6% thanks to impressive tourism and investment performance. As noted by the House of Representatives, Greek tourism is strong and moving ahead of 2019 levels. This, together with the gradual normalization of credit activities and the benefits of reforms and European Union funds, could push real GDP growth to 6% this year.

Wood explores two macroeconomic scenarios to analyze the outlook for the EU economy. Scenario 1 reflects minor disruptions to energy flows, essentially reflecting the continuation of the war in Ukraine, but not to the point of causing permanent energy shortages. In Scenario 2, the base case is a significant energy shortage, making 2023 a recession year for the region.

Thanks to the impressive figures of tourism and investment.

Under Scenario 1, growth in Greece will move to 6% this year and 2.5% in 2023, while inflation will move to 13% and 7.5%, respectively. In Adverse Scenario 2, associated with significant energy shortages, the Greek economy is expected to grow by 6% this year but enter a 2.6% recession in 2023 with inflation at 13% this year and 9% in 2023 year. The ratio to GDP will fall to 190% this year from 198% in 2021 and to 184% in both scenarios.

It is worth noting that in both scenarios, the performance of the Greek economy will be higher than that of other economies, while the eurozone in scenario 1 will record growth of 2.5% this year and 1.2% in 2023, while in scenario 2 it will move at a rate of 2.3% this year and will enter a 3.5% recession in 2023.

Greece’s outlook for the coming years is just as optimistic, with Wood seeing potential growth up to 3%, which should help the country outperform the rest of the region, even in its thorny energy transition. Greece, Wood notes, also has an exceptional record in foreign direct investment, which is a good barometer of a country’s global competitiveness with a net inflow of 3.3% of GDP.