The European Commission has proceeded with an upward revision of its projections for Greek growth in the text of economic forecasts for member-states, which was recently released. In particular, the European Commission estimates that GDP will increase by 2.4% against 2.3% of the previous (autumn) forecast, while maintaining at 2% of GDP the corresponding estimate for 2021; meanwhile, a 2.2% rate is projected for 2019.
According to winter forecasts, growth in 2020 and 2021 will be at 2.4% and 2.0% respectively (versus 2.3% and 2.0% reported in the autumn forecasts). Similarly, inflation in 2020 and 2021 will reach 0.7% and 0.9%, against the autumn forecasts of 0.6% and 0.9%.
Investment and consumption boost the Greek economy according to the European Commission’s winter projections, while for exports it reports that, despite slowing growth rate in some of Greece’s main export markets, export growth remained robust, indicating further market share gains including the tourism sector. Growth in 2019 was also positively affected by the sharp increase in public consumption ahead of the July general elections, while private consumption and investment growth remained sluggish.
The labor market continued to improve, with unemployment rate dropping to 16.6% in October 2019, down from 18.5% a year earlier, although it remains the highest across Europe. The recent increase in the number of workers, an average of 2% on an annual basis in the first three quarters, is due to an increase in the number of employees, while the number of self-employed has decreased. Employment is expected to continue to expand in the coming years.
The services sector continued to be the main source of growth in the first three quarters of 2019. The rebound in the construction industry also contributed positively to growth in the first half of 2019.
According to the Commission, business confidence has returned to pre-crisis levels, while investment and consumption are expected to be the main drivers of growth. /ibna