In 2024, the Greek economy continued its growth trajectory despite uncertainties in the international environment. In the first nine months of 2024, real GDP increased by 2.3% year-on-year, a rate significantly higher than the Eurozone average (0.6%). According to available data, short-term economic activity and expectation indicators suggest that the Greek economy will maintain its growth momentum in the medium term, with a steady rate close to 2%. Notably, the Economic Sentiment Index remains above the Eurozone average, supported by strengthened business expectations.
The unemployment rate maintains a downward trend, primarily driven by the increase in employment. This trend, according to the employment expectations index, is expected to continue in the medium term, simultaneously boosting the overall disposable income of households and consumption. Nevertheless, a fundamental condition for the development of a sustainable labour market is the gradual increase in the population's labor force participation rate, that is, achieving greater inflow and retention of individuals in the labour force. It is noting that, this rate in Greece stands at 52% in 2023, compared to 58% in the Eurozone.
Inflationary pressures from previous years are gradually easing, with the general index standing at 2.8% (Jan-Nov 2024). Nonetheless, since mid-year, the divergence between national and core inflation is significant, highlighting the impact of the services sector on the overall increasing cost of living.
Private consumption remains the main component of GDP and economic growth, and we believe it will continue to play the most vital role. However, we must not overlook that the growth outlook of the Greek economy depends on the utilization of European and national funds to implement investment plans and boost entrepreneurship. This development will have a dual effect: on the one hand, the value of investments will contribute to GDP and mathematically improve the growth rate, and on the other hand, in the long term, it will have a multiplier effect, supporting new jobs and fixed capital productivity. By 2027, the country will have secured approximately €78.6 billion from European Union sources and around €17 billion from national resources. Investments are expected to accelerate in the coming years, considering the maturity of investment plans and projects implemented under the Recovery and Resilience Facility (RRF). However, the goal should be the rapid increase in the ratio of fixed capital investments to GDP (15% of GDP) and convergence toward the Eurozone average (22% of GDP), as well as the reduction of the investment gap and the depreciation of industrial equipment that occurred during the economic crisis.