The Parliamentary Budget Office places the growth rate for this year at 2.5% and inflation at 2.9%. An estimate compatible with the updated forecasts from the Commission, the IMF and the Bank of Greece, which see this year’s growth rate of the Greek economy between 2.1% and 2.5%.
The figure is based on the estimate that 25% of the resources from the Recovery Fund will be channeled into the real economy. A decisive factor for achieving a high growth rate of more than 2.5% is the acceleration of the rate of investment and the channeling of the Recovery Fund’s resources – grants and loans – amounting to 3.6 billion euros planned for 2024.
The scenarios
The following alternative scenarios are included in the report:
-If the Recovery Fund’s resources are absorbed by the real economy by 50%, the annual GDP growth rate for 2024 will be 2.7%.
-If the rate of absorption reaches 75% of their total, the annual GDP growth rate increases to 2.9%, which is the forecast included in the 2024 Budget.
-If the Recovery Fund’s resources are channeled into the real economy, the annual GDP growth rate is set at 3.2%.
Inflation
In 2023 inflation stood at 4.2% while its de-escalation over the last months is evident. According to the analysis of the Parliamentary Budget Office, this de-escalation trend is mainly due, as in the Eurozone, to the significant drop in the cost of energy which now has a negative contribution to the evolution of inflation.
Particularly persistent is food inflation which, according to the analysis, contributed 56% to overall annual inflation between January 2023 and January 2024, reducing the purchasing power of the most vulnerable households.
