The Bank of Greece (BoG) downgraded its estimate on growth rates in 2024, according to the Interim Report on Monetary Policy released on Wednesday.
More specifically, the growth rate of the Greek economy is estimated at 2.5% in 2024, down from 3% which was the previous forecast. In 2025, it is expected to stand at 2.5% and slightly fall to 2.3% in 2026. The revision reflects the downward revision of euro area growth and the expected higher-for-longer interest rate environment.
In the years ahead, the economy will continue to be driven by private consumption, investment and exports, while net trade should have a marginally negative contribution. Monetary policy is expected to keep having a restrictive effect on economic activity, while a positive contribution to growth is expected from investment, backed by RRF funds.
Inflation is projected to continue its downward path. In 2023, it is expected to turn out at 4.1%, down from 9.3% in 2022, on the back of a large fall in energy prices. By the end of the projection horizon (2026), inflation should converge towards the 2% target of the European Central Bank (ECB). All its components are expected to contribute to the declining path of inflation. Core inflation is projected to stand at 5.3% in 2023, but to drop sharply in 2024 and to decline steadily thereafter.
