Greek Economy Grew by 2.7% in Second Quarter

The Greek economy recorded a growth rate of 2.7 percent in the second quarter of 2023 compared to the same period in 2022, according to data compiled by the Hellenic Statistical Authority (ELSTAT).

ELSTAT data indicate that, on an annual basis, consumer spending increased by 2.0 percent (+3.2 percent of households), gross fixed capital investment by seven percent, exports of goods and services by 0.1 percent (with exports of goods down 1.8 percent and services up 1.3 percent), while imports of goods and services rose just 0.6 percent (with imports of goods down 1.2 percent and service imports up by 6.1 percent).

The Hellenic Statistical Authority also revised first-quarter data to show the economy stagnated, rather than shrinking by 0.1 percent as initially estimated.

The government expects growth will reach 2.3 percent in 2023 and accelerate to 3 percent in 2024 and 2025. Tourism is once again supporting expansion as international visitor numbers were up by more than a quarter in the first half compared with a year ago. Revenue from tourism, as a result, jumped by 24 percent in that period.

Greek economy’s growth could result in further ratings boosts

The result strengthens the case for further ratings boosts, Bloomberg says. DBRS Morningstar is set to update its assessment on Friday, with markets expecting it will join Scope Ratings and Rating and Investment Information Inc. in placing Greece at investment level.

The DBRS move would be more significant than the previous upgrades, as it would make Greek government bonds eligible to be used as collateral at the European Central Bank.

In August Scope, the leading European provider for credit ratings, raised Greece’s rating to investment grade.

Scope upgraded Greece’s long-term local- and foreign-currency issuer and senior unsecured debt ratings to BBB-, from BB+, and revised associated outlooks to stable, from positive.

The move followed the Japanese rating agency Rating and Investment Information (R&I), which also announced it has raised the Greek economy rating to investment grade BBB-, with a stable outlook.

Scope said the upgrade reflects the sustained European institutional support for Greece, reflecting changes since the Covid-19 crisis to support vulnerable euro-area member states via monetary- and fiscal-policy interventions.

It also reflects a steady trajectory of decline in public debt, on the back of high inflation, above-potential real economic growth, low average interest costs of the prevailing debt portfolio and achievement of primary fiscal surpluses. Greece’s public debt to GDP ratio is expected to fall to 160.7 percent by 2023. This is a significant decline from the 2020 peak.

The rating agency added that structural reforms have meaningfully curtailed high non-performing loan (NPL) ratios and substantively enhanced banking-system stability.