Greece’s economy remains resilient, according to the OECD’s six-monthly report (Economic Outlook). More specifically, it is expected to grow at a rate of 2% in 2024 and 2.5% in 2025 as rising employment and strong tourism boost consumption.
Despite the slowdown in new job growth, the employment rate and labour force shortages remain at historically high levels, the report pointed out.
The OECD noted that wage growth reached 5.5% in the fourth quarter of 2023 on an annual basis, with the minimum wage increasing by 9.4% in April 2023 and a further 6.4% in April 2024.
The absorption of Recovery and Resilience Fund resources and continued improvement in bank soundness will support investment, despite tight financial conditions, the report added, while investments are expected to increase by 9% in 2025.
Inflation will continue to decline, but at a slower pace and is forecast to ease to 2.1% in the last quarter of 2025.
The forecast for a primary surplus of 1.8% of GDP in 2024 and 2.1% in 2025 seems on the right track, given the high public debt, the report said, which is estimated to decline to 151% of GDP in 2025 compared to 161% in 2023. The growth of the economy and further progress in the fight against tax evasion are expected to boost public revenues.
The OECD explained that the Greek economy is faced with the challenges of strengthening productivity and fiscal adjustment due to high debt.
In order to continue reducing the debt, alongside the high spending that is necessary due to the low investment in the decade of the crisis, the ageing of the population and the response to climate change, sustained and strong economic growth will be needed, it was underlined.
Productivity growth, which is a third lower than the OECD average, would simultaneously create more fiscal space and raise living standards.
