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Greece draft budget: Economy to recover all of its 2020 losses in 2022 Q4

The Greek economy is expected to recover all losses suffered in 2020 in the fourth quarter of 2022, with the country’s real GDP surpassing the 2019 level by 1.7 pct at the end of 2022, according to the provisions of the draft budget plan tabled in Parliament on Monday.

More specifically, the country’s GDP is projected to grow by 6.1 pct this year and 4.5 pct in 2022, after contracting by 8.2 pct in 2020. Private consumption is projected to rise 2.9 pct this year, after falling by 5.2 pct in 2020 and to grow by 2.9 pct in 2022. Public consumption is expected to rise by 4.1 pct this year and to fall by 2.8 ct in 2022, after rising by 2.7 pct in 2020, as the government will gradually lift support measures. Private investments, which fell 0.6 pct last year, are projected to jump 11.1 pct this year and to soar by 23.4 pct in 2022 helped by the inflow of funds from the Recovery Fund. Exports of goods and services fell 21.7 pct in 2020, but are expected to rise 14 pct this year and 11.1 pct in 2022. Imports are projected to rise 6.6 pct this year and 8.9 pct in 2022, after falling by 6.8 pct in 2020. Unemployment is projected to fall to 16 pct this year and to 14.3 pct of the workforce in 2022, from 16.3 pct in 2020.

The draft budget plan noted that the National Recovery and Resilience Plan is expected to add 2.9 percentage points of GDP in 2022 without taking leverage into account, while a gradual return to normality, based on the vaccination programme, will offer additional economic benefits. A return to normality is expected to facilitate the stabilisation of fiscal data and support a further recovery of the tourism sector, with travel receipts expected to rise by 60 pct compared with 2021. The draft budget also envisages that the implementation of certain developmental measures, of a permanent nature, focusing on an improved investment environment and boosting households’ income, are expected to support economic recovery.

Real GDP is expected to grow by 4.5 pct in 2022 compared with 2021 based on private consumption (2.9 pct), investments (23.4 pct), export of services (21 pct), employment (2.7 pct), while the inflation rate is projected at 0.8 pct in 2022.

The draft budget plan noted that the Greek GDP is expected to grow by 6.1 pct in 2021, recovering 68.1 pct of losses suffered in 2020. [amna]

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