66
Greece Growth is projected to slow from 2.4% in 2023 to 2.0% in 2024 before picking up to 2.4% in 2025. Real consumption growth has slowed due to high living costs and damage from recent weather events, but will pick up as gradually declining inflation and continued employment growth raise households’ purchasing power. Improvements in the business environment, increasing disbursements of European Union funds and strengthening global economic conditions will support investment and exports. The decline in headline inflation will be slowed by wage pressures arising from labour shortages. Achievements in structural reforms and debt reduction have been reflected in Greece’s sovereign debt rating, which returned to investment grade in September 2023. With still low labour productivity, further reforms to remove obstacles to invest – notably in the justice system – and improve skills should be priorities to achieve higher living standards and ensure long-term fiscal sustainability. Recent wildfires and floods emphasise the need to adapt to a hotter climate, notably by broadening property insurance coverage. Greece’s economy remains robust GDP rose by 1.3% over the first two quarters of 2023. Private consumption was supported by expanding employment, which is at its highest level since 2010, and by slowing inflation. The rapid fall in the unemployment rate is contributing to rising wages; wage cost indices rose by 4.3% in the year to the second quarter of 2023. Headline inflation dropped to 3.8% in the year to October 2023 as energy prices eased. Real investment grew by 7.9% in the year to the second quarter of 2023, despite rising borrowing costs. Business expectations remained positive in October 2023 and purchasing managers’ expectations continued to point towards expanding demand. Forest fires and floods caused large economic damage in mid-2023, especially among manufacturing and agricultural sectors.
Greece
1. Labour force participation rate, as a percentage of population aged 15-74. Source: Eurostat; and OECD Economic Outlook 114 database. StatLink 2 https://stat.link/gsq6oh
OECD ECONOMIC OUTLOOK, VOLUME 2023 ISSUE 2: PRELIMINARY VERSION © OECD 2023