The Organization for Economic Co-operation and Development (OECD) expects growth of the Greek economy at 6.7% for 2021 and 4.8% for 2022, publishing the revised analysis of December, with a simultaneous rise in inflation to 3.1% next year
Strong growth, according to the Agency, is projected as the improved business climate and the national recovery plan boost incomes and investments, while government support will continue – to a limited extent – to support incomes and consumption in 2022, with a further impetus given by the 2% increase in the minimum wage from the beginning of the new year. Exports will be boosted by the recovery of global demand and global tourism.
Investment and private consumption are expected to accelerate in 2022, recording an increase of 17.3% and 4.4%, respectively, from 14% and 2.1% this year. Exports of goods and services are expected to grow 14.2% this year and 13% next year.
Unemployment and tourism
Unemployment is estimated to fall to 14.6% this year from 16.3% last year, while it is expected to decline significantly in 2022 to 12.9%.
A key risk, according to the OECD, is that deteriorating health conditions will lead to new travel restrictions and limit the recovery of tourism.
Coronavirus and death rates in Greece after July this year are higher than most other OECD countries, reflecting the lowest vaccination rates, with 61.5% of the population fully vaccinated in October, the report said, adding that Recent measures may encourage more vaccinations.
Inflation at 3.1% in 2022
The OECD says inflation expectations are rising and since mid-2021 are above the average of recent years in manufacturing, construction and retail, but notes that price increases are likely to be limited by slow production capacity. The harmonized index of consumer prices is projected to reach 3.1% in 2022 at average levels compared to 0.4% this year and structural inflation – which does not take into account the prices of food, energy, alcohol and tobacco – to reach 1.9% from -1.2%, respectively.
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