Greece: Strong economic momentum in 2023

Infrastructure projects play an important role in a country's economy. The Ministry of Infrastructure and Transport is expected to announce new agreements for projects such as the northern road axis of Crete, the extension of the Thessaloniki ring road and the new metro lines in Athens and Thessaloniki. In addition to the contracts for new infrastructure projects amounting to 2 billion euros, the delivery of a large part of the projects that have started is also expected. Parts of the Hellinikon park, which is the largest urban regeneration in Europe, are already being delivered. Such projects are expected to create thousands of jobs, boost trade, attract investment and help grow tourism which is a key pillar of revenue and growth.

In the area of ​​inflation now despite the continued de-escalation due to the temporary weather-related drop in energy prices, consumer-perceived real price inflation is becoming even more unsustainable. This is because the decline expected to continue into the first quarter of 2023 is accounted for by the fact that the new prices are compared to the already increased ones of late 2021 and early 2022. In order to relieve households from rising prices, the government staff decided to extend the validity of the support measures and introduced some new ones. In particular, the subsidy continues on household electricity bills depending on the price of the kilowatt hour, subsidizing heating oil at gas stations with the aim of reducing the price and the amount of the household heating allowance was doubled. A new measure that will come into effect in February is the granting of an allowance for purchases from the supermarket. The amount will be calculated according to the family situation of each person.

All of the government's relief measures depend on the fiscal margin that exists. The big goal for Greece is fiscal stability as the management so far has brought us 2 levels below the investment level of the rating agencies. It is now possible in 2023 to recover the positive assessment of the investment grade after several years of financial crisis and pandemic. When this goal is achieved, it will mean cheaper borrowing, the reduction of the debt-to-GDP ratio, the attraction of strategic investments and the return of the Greek economy to stable bases.

Reference/ Citation