The Greek economy is expected to grow by 2.5% this year and 2% in 2024, significantly exceeding average growth rates of 0.7% and 1.2% in the eurozone, the International Monetary Fund (IMF) said in its World Economic Outlook report released on Tuesday.
The IMF said it expected the country’s European Union-harmonized inflation rate to fall to 4.1% on average in 2023 and to 2.8% in 2024 (against 5.6% and 3.3% in the eurozone, respectively).
The unemployment rate in Greece is expected to fall to 10.8% of the workforce this year and to 9.3% in 2024 from 12.4% in 2021, while the country’s current account deficit is expected to fall to 6.9% of GDP this year and to 6% of GDP in 2024.
In the eurozone, the current account balance is expected to show a surplus of 1.2% of GDP this year and 1.4% in 2024.
IMF forecast for Greek economy growth is lower than the government’s
The IMF forecast for the growth is lower than the estimates of the Greek government.
The 2024 budget tabled in Parliament earlier in October shows that Greece’s economy is projected to grow at a faster pace next year, rising by 3.0 percent compared to a 2.3 percent expansion this year.
According to the draft budget, Greece is expected to achieve a primary budget surplus of 2.1 percent of gross domestic product (GDP) next year. This excludes debt servicing payments.
The Greek government’s “main goal remains high growth that will far exceed the European average,” noted Prime Minister Kyriakos Mitsotakis at the Hellenic Federation of Enterprises (SEV) general assembly meeting on Tuesday evening.
“Growth must generate quality jobs, a growth leading to the convergence of Greek wages with European ones, a type of growth that will pay great emphasis to the idea of sustainability and of green transition,” he added.
Mitsotakis stressed that even greater emphasis should be paid on resilience against the challenges of climate change, while “growth cannot turn a blind eye on the colossal changes in the world of artificial intelligence, and the next phase of digital upscaling, which changes everything in how we understand our relationship with technology.”
The government is keeping an eye on the next two ratings by credit agencies S&P Ratings (October 20nd) and Fitch Ratings (December 2nd) in the hopes that at least one of the two will provide Greece with the much-sought-after investment grade.
In September, the ratings firm Moody’s gave Greece’s economy a significant vote of confidence by raising the country’s credit rating by two notches.
IMF’s baseline forecast is for global growth to slow from 3.5 percent in 2022 to 3.0 percent in 2023 and 2.9 percent in 2024, well below the historical (2000–19) average of 3.8 percent.
IMF forecast for global economy
Advanced economies are expected to slow from 2.6 percent in 2022 to 1.5 percent in 2023 and 1.4 percent in 2024 as policy tightening starts to bite.
Emerging market and developing economies are projected to have a modest decline in growth from 4.1 percent in 2022 to 4.0 percent in both 2023 and 2024.
Global inflation is forecast to decline steadily, from 8.7 percent in 2022 to 6.9 percent in 2023 and 5.8 percent in 2024, due to tighter monetary policy aided by lower international commodity prices.
Core inflation is generally projected to decline more gradually, and inflation is not expected to return to target until 2025 in most cases.