Changing the GDP “recipe” through a higher participation of investments and exports, Greece was placed in the top ten countries with the highest growth during the first quarter of this year.
However, despite the fact that the share of “gross fixed capital formation” has returned after many years to close to 15%, the dependence of the Greek economy on private consumption remains very high, which means that there is the risk of a slowdown, especially if the wave of steep price hikes in the market continues, which has now spread throughout the spectrum of economic activity. Precisely because the share of consumption in GDP remains very important, any reduction in consumption will also be strongly reflected in the overall course of economic activity.
“Sinking” of investments
The economic recession during the memoranda period sank investment, which reached 9.5% of quarterly GDP in 2015 and 9.97% of annual GDP. After the agreement on the Recovery Fund and the first disbursements, the participation of investments in the GDP started to increase again. In the first quarter of 2023, the ratio of gross fixed capital formation to GDP reached 14.52% from 13.70% in the first quarter of 2022 and 10.97% in the first quarter of 2019. The recipe of “extroversion” has also been reflected in exports of goods and services figures. In the first quarter of 2023 (a period in which tourism, which is counted as an export of services, does not play such an important role), the ratio in GDP reached 39.33%, from 36.87% in 2022 and 37.53 % in 2021. This increase, however, was “neutralized” by the expansion of the rate and imports, mainly a consequence of the price increases in energy but also in food which is imported in a very large percentage. Imports have now reached 44.36% of GDP, up from 38.84% in 2019 and 42.88% in 2022.
Great dependency
The percentage of consumption has not changed substantially. Greek GDP remains dependent on household consumption at a rate that remains higher than 70%.
