Greece’s economy is expected to grow by 2.1 percent this year under a baseline scenario, according to the think tank IOBE. This figure represents a downward revision from IOBE’s previous estimate of 2.4 percent made in January. The revision is attributed to lower anticipated contributions from exports and private consumption. IOBE’s new projection falls below the government’s estimate of approximately 2.9 percent growth for this year, which would significantly outpace the euro zone average of 0.8 percent.
IOBE stated that tourism, the primary driver of Greece’s economy, is expected to perform well this year. Tourism accounts for approximately one-fifth of the country’s economic output. The think tank also predicted an inflation rate of 3 percent and an unemployment rate of 10.3 percent for this year.
Foreign direct investment in Greece
A decade ago, Greece experienced a severe debt crisis characterized by years of austerity measures, hardships, and social unrest. However, officials and investors now believe that 2024 could mark the completion of Greece’s recovery. Over half of the foreign direct investment in Greece, which amounted to around 7.5 billion euros ($7.98 billion) in 2022, originates from northern European countries such as France and Germany, which are grappling with weak economic growth. Greek exports, including agricultural goods, fuel, and pharmaceutical products—two-thirds of which are destined for the EU—declined by nearly 9 percent last year. The country’s economic growth rate slowed to 2 percent in 2023, partly due to the underperformance of its neighboring economies.
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High unemployment rates
Despite the overall economic recovery, many Greeks have not experienced an improvement in their living standards. Unemployment remains above 10 percent, second only to Spain within the EU, and Greece’s GDP per capita in terms of purchasing power is among the lowest in the bloc according to Eurostat data. Additionally, the average monthly salary of 1,175 euros is 20 percent lower than it was 15 years ago, as reported by the labor ministry.x
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