Growth rises to 2.3% in Q2

The Greek economy expanded at a rate of 2.3% in the second quarter of 2024 compared to the same period of the previous year. That is a pace in line with the government’s forecast for 2.5% growth for the year overall, according to economists, although most forecasts are still in the 2% to 2.4% range.

On a quarterly basis, moreover, growth was at 1.1%, a rate that ranked the Greek economy in second place in Europe, after Poland, according to Friday’s Eurostat data.

That gave Prime Minister Kyriakos Mitsotakis the opportunity, a day before his speech at the Thessaloniki International Fair on Saturday, to talk about “encouraging news,” adding: “However, for growth to be meaningful, it must translate into even more, better-paid jobs, increased disposable income and reducing inequalities. More in my speech at TIF.”

However, the individual characteristics of GDP growth contain worrying elements and do not send signals of a change in the Greek growth model: Consumption remains a driving force (that of households increased by 2%), investments are increasing but not at a particularly dynamic rate (3.9%, when the government’s forecast is for an increase on an annual basis of 9.1%), and in external trade, the problems are intensifying, due to a large increase in imports (by 9.6%, against an increase in exports of only 2.1%).

On the other hand, economists point out that achieving a rate higher than that of the EU shows that convergence is gradually being achieved.

“It is important that we are growing faster than Europe. And this is constant, so it helps with the issue of convergence,” says Panayotis Kapopoulos, chief economist of Alpha Bank.

However, he adds that “it is worrying that the trade deficit is widening. Of course, the weak growth of our exports is due to the anemic growth of Northern Europe and especially Germany. On the other hand, imports are galloping as consumption in the country remains strong, fortunately, without the contribution of public spending.”

Source: ekathimerini.com–Eirini Chrysolora