The European Commission has forecast strong growth rates of 7.1 percent in 2021 and 5.2 percent in 2022 for Greece in its autumn economic forecasts, published on Thursday.
The EU’s executive revised its forecasts for 2021 upwards compared to those published in July (4.3 percent) and slightly downwards for 2022 (from 6 percent).
The forecast is even higher than Greece’s own forecast. In October, the country announced that its economic growth will reach an astounding 6.1 percent in 2021, according to the provisions of the draft budget plan brought before Parliament.
More specifically, the country’s GDP is projected to grow by 6.1 percent this year and 4.5 percent in 2022, after contracting by 8.2 percent in 2020 due to the pandemic.
The Greek economy is expected to recover all losses suffered in 2020 in the fourth quarter of 2022, the Greek draft budget forecast.
Growth based on domestic demand, tourism
“The impact of the pandemic is expected to gradually soften, while the accommodative fiscal and monetary policy, coupled with the strong boost from the Recovery and Resilience Plan, are set to sustain the momentum going forward. Emergency support measures are being adapted to the evolving needs of the economy, and expected to be largely phased out by the end of 2021, supporting the reduction of the general government deficit.”
The report stressed that the growth of the Greek economy gained momentum in 2021, as “Greece’s economy rebounded strongly in the second quarter of 2021, by 3.4 percent compared with the previous quarter.
Real GDP reached its pre-pandemic level in the second quarter of 2021. The recovery was driven by domestic demand, in particular investment, and by the accumulation of inventories, while the ongoing fiscal stimulus provided a crucial role in supporting the economy.”
We will continue on the same path for growth, Greece says
The European Commission’s autumn forecasts for Greece confirm that the policies adopted by the government are both correct and effective, Finance Minister Christos Staikouras commented on Thursday.
“Greece is recovering strongly and growing sustainably, investments and exports are increasing significantly and unemployment is shrinking, while cash reserves continue to be at safe levels and public finances are being managed responsibly,” he said.
“The Greek government will continue to implement policies so that the country emerges from the successive external crises economically even more resilient, nationally stronger and socially fairer,” Staikouras added.
He noted that the forecasts:
- Confirm that the recovery and growth of the economy will be strong and sustainable, with stronger growth rates than the initial forecasts and the European average.
- Confirm that the economic growth rate will be sustainable as it is based mainly on an increase in investments and exports, with a two-digit growth forecast in investments and the highest rate of growth forecasts in exports on a European level.
- Confirm that unemployment has declined significantly in the last two years, in spite of the pandemic, and will continue to fall.
- Confirm that annual inflation in 2021 and 2022 will be the lowest in the EU, indicating that the Greek economy is showing resilience and strength.