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Greece Growth Rate to Drop Dramatically in 2023

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According to predictions, the growth rate in Greece will drop significantly in 2023, but it will still be well above the EU average. Credit: Armineaghayan / wikimedia commons CCBY-SA4.0

Greece unveiled its 2023 budget in Parliament which foresees a significant drop in growth rate that will reach 1.8 percent from the estimated 5.6 percent of the current year.

The budget is the first Greece has posted in twelve years that is free of direct scrutiny or the “enhanced surveillance” it had been under by European lenders during the country’s financial crisis.

The fact was highlighted by Finance Minister Christos Staikouras. “It is the first [budget] in the last [twelve] years that was drawn up outside of a framework of memorandum supervision or enhanced surveillance, in this way sealing Greece’s return to European normality,” he said while also noting the economy’s return to primary surpluses.

Despite the drop, Greece to record higher growth among EU nations

Staikouras added that: “It is a budget that highlights the hardiness and increased resilience that the Greek economy has shown during successive crises, recording its steady, strong and sustainable course of growth, as well as the significant decline, by more than five points relative to 2019, of unemployment, and reflecting the great potential and prospects of the country.”

As Staikouras noted in his statement to the Athens-Macedonia News Agency (AMNA), “these figures are also confirmed by the European Commission, which forecasts that Greece will achieve growth rates in 2022 that are double the European average and the third-highest in the Eurozone, and triple the European average in 2023.”

At the same time, he warned, the government does not overlook the fact that the international environment remains “unsettled, filled with high levels of uncertainty, rising dangers, new threats and great volatility, which affect our country as well.”

Inflation in Greece eases

The budget projects harmonized inflation falling to five percent in 2023 from 9.7 percent this year. It also predicts a primary surplus—the annual balance before debt servicing costs —of 0.7 percent of the gross domestic product next year, compared to a primary deficit of 1.6 percent this year.

The inflation rate in Greece in October fell to 9.5 percent—below the EU average. It had risen to 12 percent in September, up from 11.4 percent in August and 11.6 percent in July.

The rising cost of living sparked protests in Greece as well as in other countries in the European Union, where inflation in the Eurozone areas hit a record high of 10.6 percent in October, up from 9.9 percent in September.

This represents the highest-ever monthly reading since the eurozone’s formation. The nineteen-member bloc has faced higher prices, particularly on energy and food, for the past twelve months, but the increases have been accentuated by Russia’s invasion of Ukraine in late February.

The lowest annual rates were registered in France (7.1 percent), Spain (7.3 percent), and Malta (7.4 percent). The highest annual rates were recorded in Estonia (22.5 percent), Lithuania (22.1 percent), and Hungary (21.9 percent).

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