OECD: Greek Economy Resilient with 2% Growth Forecast for 2024

The Greek economy remains resilient and is expected to grow at a rate of 2% this year and 2.5% in 2025, as increased employment, real wage growth, and strong tourist activity bolster consumption, according to the semi-annual report by Organization for Economic Co-operation and Development (OECD).

Wage growth hit 5.5% in the fourth quarter of 2023, with the minimum wage rising by 9.4% in April 2023 and a further 6.4% in April 2024, according to the OECD.

Despite tight financial conditions, investments are set to increase by 9% in 2025, supported by the absorption of resources from the Recovery and Resilience Fund and ongoing improvements in bank resilience.

Furthermore, the report forecasts that inflation will gradually decrease, reaching 2.1% in the last quarter of 2025.

The report also anticipates a primary surplus of 1.8% of GDP this year and 2.1% in 2025, attributing this to high public debt which is expected to decrease to 151% of GDP in 2025 from 161% in 2023. Economic growth and efforts to combat tax evasion are seen as key contributors to bolstering public revenues.

However, the OECD highlights challenges including the need to enhance productivity and fiscal adjustment due to high debt levels. It suggests removing barriers to investment by strengthening the justice system, addressing remaining obstacles in retail trade and liberal professions, and enhancing adult education quality and accessibility as vital steps toward increasing productivity.