What can bring the positive surprise to growth this year?

Of Tasos Dasopoulos

Continuation of the good start made by the economy in the first quarter of the year, recording a growth of 7%, the Ministry of Finance sees for the second and third quarters of the year as well, since despite the persistent high inflation, Greece seems to maintain the growth momentum it developed from in 2021.

After the first good quarter, the baton of growth for the second quarter seems to be taken by tourism. In addition to the increase in arrivals for the entire season this year, the difference for the second quarter of the year for tourism is made by the fact that, while in 2021, the season started gradually from June, this year the season runs from the beginning of April.

The proof that things are going better than last year comes from the Bank of Greece, which records for the first five months of the year, an increase in the surplus of services by 2 billion euros, mainly due to tourism and transport. While we are in the middle of the third quarter, the messages are positive and the professionals in the field are already talking about extending the season, until December.

The economic staff set a growth target for this year of 3.1% with tourism recovering approximately 80-85% of the turnover of 18.5 billion euros recorded in 2019, i.e. approximately 15 billion euros. Based on the indications so far, the turnover is expected to even surpass the turnover of 2019. However, the return of the turnover for the sector, to the levels before the pandemic, will add about 3.5 billion euros, to the GDP of 2022.

The investments

Investments are the second “good card” of the economy for 2022. Investments recorded last year, excluding those made with the assistance of community funds, reached 5 billion euros. According to members of the financial staff, if one takes the traffic that exists in the first half of the year, it is possible that this amount will double.

The second part concerns public investments where there is an acceleration dynamic. The 1.5 billion euro subsidy programs for small and medium-sized enterprises, the new “Save”, will be direct investments that did not exist last year.

In total, more than 300 projects of the national program Greece 2.0, with a budget of 11.2 billion euros, have been joined and activated. Also, the private investment arm of the Recovery Fund has gained new momentum, following the change in monetary policy by the ECB.

The low-interest loans of the Development Fund have already attracted investment proposals with a total budget of 2.65 billion euros, which are expected to double by the end of the year.

Support measures

Another option of the Ministry of Finance, which will help the economy not to “slow down” due to the economic crisis, is the adequate support of the economy, in the face of the price increases mainly of fuel but also of food. The support is provided through both emergency and permanent measures which make up for a large part of the loss of income due to revaluations.

The emergency measures include the fuel subsidy, the absorption of the adjustment clause until mid-2023 and the punctuality check. So far, these measures have reached 8.4 billion euros.

Together with the new measures expected to be announced in September and October, the support package until the end of the year is expected to exceed 11 billion euros. This money will minimize the effects of accuracy by “maintaining” GDP.