Handelsblatt: Revenue up to 20 billion euros – The Greek economy benefits from tourism

Today’s article by Handelsblatt makes special reference to Greek tourism.

Characteristically, he mentions that in Greek tourist hotspots, today you have to look for a long time to find a free bed. “We are full until September,” says Andreas Papadopoulos, who runs a small three-star hotel in Paros.

This summer, holidays in Greece are more in demand than ever. Greece is leaving behind the tourism slump of the coronavirus years 2020 and 2021. Market watchers expect a new travel record for 2022.

This will benefit not only hoteliers, tavern owners, souvenir traders and car rental companies, but also the Greek economy as a whole. In good years, like this year, tourism contributes more than 20% to the gross domestic product (GDP). As a result, rating agencies and international banks are now raising their growth forecasts for Greece.

Thanks to the influx of tourists, Greeks are expected to escape the recession that could threaten other EU countries due to the war in Ukraine and the energy crisis.

In the 14 main regional airports of Greece, which have been managed since 2017 by the German company Fraport, 5.13 million passengers were counted in July. This was 14% more than the previous record year of 2019, with traffic figures for the first seven months of the year 4.2% higher than in the pre-crisis year 2019.

During that period, 31.3 million foreign visitors came to Greece. Another 2.6 million visited the country as cruise ship passengers. Market watchers expect a 5% increase in visitor numbers this year compared to 2019. The biggest market for the Greek tourism industry remains Germany. But America is becoming more and more important.

Figures for June and July show a 50% increase in US visitors compared to 2019 – a result of improved flight schedules: the three major US airlines Delta, American and United are offering nine daily direct flights from US cities to Athens this summer, more than ever before.

Visitors from the USA are welcome in Greece because they are very generous. Excluding airfare and hotel costs, they spend €1,010 per head, compared to an average of €627 for other foreign visitors.

Strong growth through tourism

In 2019, revenues from tourism amounted to 18.2 billion euros, according to calculations by the Bank of Greece. Andreas Andreadis, CEO of the Sani/Ikos hotel group and former president of the Greek tourism association SETE, expects an increase to 20 billion this year.

The explosion of tourism will give a strong development impetus to the Greek economy this year. Already in 2021, Greece recorded one of the highest growth rates in the EU with a GDP increase of 8.3%. Only in Malta, Ireland and Croatia did economic performance increase even more.

For 2022, the EU Commission foresees in its latest forecast one plus four percent for Greece. Other analysts are much more optimistic. The major Swiss bank UBS has now raised its forecast for growth in Greece from four to 5.7 percent. Rating agency Moody’s also puts a plus 5.7% in its baseline scenario for Greece.

The agency expects stronger growth in the EU only for Malta and Ireland. Other analysts’ estimates are around 6%. Greece is also expected to remain on a growth path in 2023. The EU Commission expects growth of 2.4% for next year, while rating agency Scope puts it at 2.5%.

Greece has a long way to go

Greece needs sustainable growth if it is to pay off its mountain of debt. The public debt crisis reached a new record of 206.3% of GDP in the year 2020 in Corona.

According to the calculations of the Greek Ministry of Finance, the index will decrease to 180.2% this year and to 146.5% in 2025, the lowest level in the last 15 years.

In addition to economic growth, inflation also helps reduce debt because inflation reduces the real value of debt. In addition, Greece has already repaid IMF bailout loans from the debt crisis years ahead of schedule in the last two years.

However, the country still has a long way to go. This follows from the EU Commission’s latest debt sustainability forecasts. According to these forecasts, the debt ratio will fall below 100% of GDP at the earliest in 2040. The country will fulfill the requirement of the EU Stability Pact, which foresees a ratio not exceeding 60%, only after in 2050.