According to the latest IOBE Quarterly Report (Q3 2022) on the Greek economy, released on January 24, 2023, the global economy is contracting in terms of growth rates, and inflation has slightly decreased, but remains at a high level (10.3% ). On the other hand, annual domestic growth reached 2.8%, lagging behind the previous quarter due to a slight decline in exports of goods and services. During the execution of the budget, fiscal targets and the annual increase in government revenues (+10.2%) were overfulfilled, and unemployment decreased to 11.6% from 13% in the 3rd quarter of 2022.

In addition, the rate of change of the consumer price index reached a high level of 9.6% during the previous year, mainly due to electricity charges. The latest official ELSTAT data for the same quarter shows an impressive growth of 12.7% in final consumer spending to 36.7 billion euros from 32.6 billion euros in the corresponding quarter of 2021, gross fixed investment excluding financial investment companies was 3. 8 billion euros. .

However, the evolution of the world economy was also the main topic of discussion at the recent session of the World Economic Forum in Davos. With the raging war in Ukraine, the energy crisis and soaring inflation causing a lot of disruptions and problems in most of the world’s economies, there is also cautious optimism about the day ahead, on the one hand, due to the strong resilience that the European economies have shown and, on the other hand, On the one hand, the latest encouraging slowdown in natural gas prices. Obviously, fears and fears have not gone away, but the opening of the Chinese economy and the impending decline in inflation leave some room for optimism, which is reinforced by forecasts for global economic growth at 2.7%. Of course, it is worth emphasizing here that the cost of servicing the debt of European economies has declined as inflation fluctuates at higher levels than interest rates.

On the other hand, the international energy organization in its latest report predicts a significant increase in global oil demand by 1.9 million bpd in 2023, reaching a record 101.7 million bpd, with half of it coming from China. . Thus, the competitiveness for additional investment in order to strengthen the supply capacity in the market is a reality. Thus, the price of crude oil is expected to rise to triple digits in the second half of 2023. As for the growth of the Greek economy in 2023, it will depend on the evolution of two (2) dynamic parameters, which, in the opposite case, can also provoke negative events!

The price of crude oil is expected to rise to triple digits in the second half of 2023.

Firstly, from the development and possible further de-escalation of natural gas prices, which fell from 340 euros / megawatt-hour to 54 euros (with the price forecast in the state budget at the level of 120 euros). A possible drop in energy prices will spread across sectors of the economy, slow down any revaluations and affect the course of inflation in the costs of basic goods and raw materials and, secondly, the course of tourism and expected income, which in 2023 it showed the same dynamics in 2022 mainly due to the slowdown in other European economies.

In addition, if inflation stops at 3.5% compared to the forecast of 9.5% and if a primary surplus forecast of around 2% is achieved in the coming years, these are encouraging signs for tomorrow. However, special attention must be paid to the structural components of inflation and the trade balance that affect the competitiveness of the economy, since they are chronic pathologies of the Greek economy.

Mr. Antonis Zairis is Vice Vice President of SELPE, Associate Professor of Business Administration at Neapolis University in Cyprus, Member of the American Economists Association (AEA) and Member of the World Economic Forum (WEF).