After enduring a severe debt crisis and years of austerity measures, the Greek economy is anticipated to gradually recover and embark on a path of stable growth. According to the latest forecasts from the Hellenic Statistical Authority, Greece's Gross Domestic Product (GDP) is projected to grow by 2.14% in 2024. With a steady economic uptick expected in the coming years, Greece is forecasted to make positive strides in multiple sectors.

Data released by the Hellenic Statistical Authority in mid-September showed that Greece's GDP grew by 2.3% year-on-year in the second quarter of this year, prompting an official revision of economic forecasts for the next few years. The Greek authorities predict that from 2025 to 2028, the Greek economy will grow at an annual rate of over 1.5%. The growth rates are expected to reach 1.72% in 2025, 1.96% in 2026, 1.86% in 2027, and 1.50% in 2028. The Greek economy is expected to maintain stable growth, thanks to reforms in digital development, green energy transition, and infrastructure construction, as well as financial support from the EU's "Recovery Fund." This growth trend also reflects Greece's ability to maintain a certain level of economic growth by relying on structural reforms and external funding amidst global economic turmoil.

A key driver of Greece's economic growth is the significant increase in investment. It is predicted that total investment in Greece will grow by 9.26% year-on-year this year, a rate much higher than other economic indicators. In addition to the growth in public investment, private investment is also expected to increase by 2.25%. This is largely due to the EU's "Recovery Fund" providing substantial funding to Greece for infrastructure upgrades, energy transition, and digital development. At the same time, the Greek government is actively attracting foreign investment by improving the investment environment, simplifying administrative procedures, and offering tax incentives to encourage both domestic and international investors to enter the Greek market.

Advertisement

The growth in private consumption is also an important factor in the recovery of the Greek economy. Data indicates that private consumption in Greece is expected to grow by 2.09% in 2024. As unemployment gradually decreases and household incomes increase, the consumption capacity of Greek residents has recovered, and consumer confidence is being restored. Additionally, the resilience of related industries such as tourism has kept the growth of Greece's service sector at a consistently high level. Although weak global demand exerts pressure on merchandise exports, Greek imports continue to grow, so robust domestic demand can offset some of the negative factors brought about by insufficient net exports.

Unlike the growth in investment and consumption, public expenditure in Greece is expected to decrease by 0.8% this year. Since the European debt crisis, Greece has been striving to control public spending, reducing unnecessary expenses to lower the public debt burden and ensure fiscal sustainability. After the outbreak of the COVID-19 pandemic, income inequality in Greece has intensified, so the government is committed to increasing the primary surplus and using the saved funds to implement more redistributive fiscal policies. For example, the Greek government recently announced a 1 billion euro package of measures to provide relief for low-income families and support job growth. The growth in the primary surplus and output will further reduce Greece's debt-to-GDP ratio to 153.1% in 2024 and 146.8% in 2025.

Overall, the outlook for Greece's economic growth is relatively optimistic, but there are some challenges that may threaten future growth potential. Greece's economic growth is highly dependent on external markets, and increased global economic uncertainty, high inflation, fluctuating energy prices, and tense geopolitical situations could all have adverse effects on Greece's exports, investments, and tourism industry. Although the Greek government has taken measures to alleviate inflationary pressures, rising energy prices, supply chain issues, and increasing prices of imported goods will all weaken household purchasing power, limit the growth of private consumption, and suppress investment意愿.

By optimizing the investment environment, accelerating innovation, and promoting sustainable development, Greece is expected to achieve steady growth in the coming years and gradually return to a healthy economic track. Despite the need for further policy support and a stable external environment, the 2.14% economic growth target for 2024 is a positive sign. Although Greece's path to economic recovery is lengthy, the prospects remain bright.