by Panos F. Kakouris

 

Greek government's economic staff is proceeding with a redesign of the policy for 2023, as inflationary pressures are still strong, while there are concerns about the evolution of the GDP.

 

Energy prices is an uncertain factor in economic developments not only for Greece, but everywhere in the world. In addition to household budgets, energy factor put an unbearable pressure on the state budget as well, due to the subsidies it is required to pay.

 

Finance ministry estimates that this year average inflation will approach 10% from 9% which was the previous estimate, while for 2023 the forecast is now for inflation of 4.5-5% from 3% provided for in the draft state budget, released on October 3, 2022.

 

High inflation rates are increasing of course the GDP, which is estimated to exceed 220 billion euros, from 210 billion,which is estimated to be formed this year.

 

However, the Ministry of Finance is preparing to revise the targets for the growth of 2022 and 2023. For this year, the target, from the 5.3% that was the last estimate, will be revised towards the region of 6%. The acceleration of growth is basically due to the increased receipts from tourism, which in the nine months of January - September have approached the pre-pandemic levels of 2019.

 

For 2023, the real economic growth target will be revised downwards due to external factors.

 

In particular, the growth limit is now placed at 1.5%, from 2.1% which is the most recent estimate. The forecast for lower growth in 2023 reflects the uncertainty about the course of the Eurozone economy and the European Union as a whole. Already, the European Commission, through its autumn forecasts, lowered Greece's growth rate to 1% for 2023.

 

According to European and international analysts, next year Eurozone will be in recession, due to the increased energy costs and the significant rise in interest rates.

 

At the same time, the EU countries which are the main source of Greek tourism revenues with the percentage, on the whole, reaching 59%, according to the latest figures for the eight months of January - August.

 

During the same period, tourism revenues in the eight months amounted to 12.75 billion euros, of which 7.45 billion euros came from travelers from EU countries, 5.89 billion euros from Eurozone's countries.

 

This element highlights the importance of tourism for the development of Greece's GDP, but, at the same time, it also highlights the dependence of the Greek economy in the framework of European economy. Analysts fear that a slowdown in growth in the EU and, even worse, a possible recession, will reduce incomes and thus will lead to a reduction of tourist flow in 2023 from Europe to all tourist destinations and unfortunately to Greece.