Greece’s economy is strong and is projected to grow at a rate of 2.3% in 2024, 2.2% in 2025 and 2.5% in 2026, according to the biannual OECD Economic Outlook report released by the Organization for Economic Cooperation and Development on Wednesday.
“Rising disposable income will strengthen consumption, as a tight labor market and minimum wage increases support wages,” the report noted, among others.
In its abstract the OECD report noted:
Greece’s economy has been outpacing the euro area average since 2021. Support measures protected households and businesses against high inflation, while public debt declined significantly. Growing disbursements of the Recovery and Resilience Funds, continuous employment gains and disinflation, and recent structural reforms are all expected to support growth. However, significant challenges lie ahead. Sustaining primary surpluses and preserving public investment are essential to maintain the debt-to-GDP ratio on a firmly declining path. This requires shifting the structure of public spending towards investment, lowering tax expenditures and tackling tax evasion further, building on recent progress. Strengthened vocational education and training, as well as better recognising prior learning and developing childcare capacity, are needed to mobilise larger parts of the working-age population and ease high labour shortages and skill mismatches. Boosting the rising, yet still relatively low level of labour productivity and investment while decoupling of emissions from activity and adapting to climate change are key to achieve sustainable rise in living standards. Further strengthening competition, reducing the regulatory burden and improving access to skills and financing would support firm growth and innovation. A mix of investment, regulations and emission pricing would help achieving net zero emissions by 2050.
The OECD noted that real household income per person is rising and is higher at present than before the pandemic, as well as being higher than expected based on pre-pandemic trends.
The fact that Greece – together with Portugal and Spain – is one of the few OECD member-states with upward revisions of potential per capita growth “also indicates that structural reforms are yielding benefits over the course of time, as these countries are among those that carried out the most reforms in the two previous decades,” the report noted.
Employment growth is projected to ease progressively amid rising labor costs, the report said.
It noted that nominal wages have increased by 8.6% in the second quarter of 2024 on an annual basis, while labor shortages are historically high.
Inflation is expected to reach 2% in late 2026 amid persistently high service costs and core inflation.
PS When I read “public spending cuts” I see patients in Greece to soon proceed and perform their own surgeries, because the conservative Mitsotakis government that follows a clear neoliberal policy when it comes to “saving in spending” the first cuts target the Health and Education sectors.
There is so much wrong with this so-called analysis that one can only depair. I shall read the report and post back when I uncover the duplicity/fraud/foolishness that underlies their claims. I have some expectations, based on my knowledge of their previous stupidities about the Greek economy, but I need to check the report.