A year of big stakes begins: to come out with… the 2023 bill requires a real growth rate, a halving of the price growth rate, preservation of tourism revenues and new, albeit weak, consumption growth, “protection” of jobs and compliance with fiscal targets with … by religious piety, in order to avoid a further increase in the public debt. And all this against the backdrop of a recession knocking on Europe’s doors, the cost of money rising at an unprecedented rate in the eurozone, the ongoing war in Ukraine, precision becoming more and more visible, but also Greece outpacing an uncertain (possibly double) election battle. If the stakes win, 2023 will end with Greece raising its nominal GDP to 224 billion euros, its debt-to-GDP ratio falling below 160%, the budget running a primary surplus, and the country restoring investment levels with brackets closed. which opened in 2009.

Difficulties will be visible with … good morning of the new year: inflation is expected to remain high during the first quarter, and the European Central Bank will announce a new interest rate hike in February (not ruling out the possibility of a sixth consecutive increase in March). It is possible that most of the eurozone countries have been in recession for the second quarter in a row. Under these conditions – and with the fact that we may officially be in the pre-election period in the first quarter – from the beginning of the new year, the foundations for 10 challenges of 2023 should be laid:

1. The biggest bet is to achieve real growth in 2023 as well. Of course, the rate has fallen to 1.8% (from 5.6% projected for 2022), but even this indicator requires a positive sign in all its individual components of GDP and mainly in consumption and investment.

2. At a nominal level, GDP should increase by 14 billion euros in 2023. This assumes real growth and inflation at the 5% limit. The merger will bring GDP to the level of 224 billion euros. Nominal GDP is taken into account to calculate the debt ratio, and especially for 2023, this is very important, as it will tend to restore investment grade.

3. Tourism revenue helped offset the loss of GDP in 2022 due to a sharp rise in energy prices, which led to a widening trade deficit. By 2023, when many of the country’s key “clients” are in recession, the equivalent of last year’s figures should be achieved, that is, annual income of more than 17 billion euros. In fact, it has been calculated that tourist receipts should exceed 95% of 2019 revenues, which is also the “base year” given that the pandemic has not yet occurred.

4. Nominal GDP of €224 billion and real growth without increased private consumption will not be easy to achieve as public consumption will be reduced to meet budgetary targets. At +1%, the target is met, but the stakes are high due to a combination of precision and increased value of money. The support measures envisaged in the budget are expected to help, but the market climate (domestic and international) will play a decisive role.

If the stakes win, Greece will regain its investment rating, closing the “bracket” opened in 2009.

5. The use of funds from the Recovery Fund and the NPF will largely determine the possibility of achieving a very large increase in investment at the level of 15.5%. The speed of private sector financing by banks is critical for 2023, and how investment activity in the real estate market develops is also a decisive element. A real estate market that has to deal with both rising interest rates and rising prices for building materials.

6. Inflation should be kept at 5% in 2023 from about 10% in 2022, which means a decrease in growth by about 50%. Yes, the comparison will help (this is the so-called base effect), but there is always uncertainty about the dynamics of energy prices and the consolidation of the inflationary climate.

7. Despite the slowdown in growth, we must not lose jobs. The goal is to further reduce unemployment to 12.6%.

8. A €5 billion budget adjustment is required in 2023 to enable us to return from a primary deficit to a surplus in view of the negotiations on a new Stability Pact. Removing some of the support measures implemented in 2022 will help.

9. Despite tax cuts (eg maintaining low VAT rates on the first half of a range of services, abolition of solidarity levy), tax revenue should increase by another 1.7 billion euros, reaching 57-58 billion euros.

10. The interrelated previous “bets” will help win the last one: the maximum increase in debt in absolute amount (no more than 1-2 billion euros) so that it remains at the level of 356-357 billion euros. and, combined with an increase in nominal GDP, lower the debt ratio even below 160%. It is necessary to achieve this goal, to produce the planned primary surplus, i.e. not exhaust public spending and not confirm the theory of the electoral cycle.