The Greek government has set an ambitious goal for economic growth in 2024 in its draft budget plan tabled in Parliament. However, a volatile economic and geopolitical environment could make it difficult to achieve its target of a 3% rise in GDP.
A 3% GDP growth rate is significantly higher than the forecasts made for the Eurozone (1.3%) and the European Union (1.4%). According to analysts, the Greek National Economy and Finance ministry is aware of the difficulties but is confident that the Greek economy can rely on certain growth pylons to achieve its goal in 2024. There are two keys to helping the economy grow: Tourism, which shows signs of strength and growth, and investments, which are expected to get a further boost after Greece obtained an investment grade rating. On the other hand, there are factors that could undermine planning and cause turbulence in the economy. The first is linked with a turmoil in the Middle East and fears for a spike in international oil prices, a development which could in turn renew inflationary pressures.
The keys to economic growth are:
1. Investments. The ministry is focused on attracting investments in 2024 and expects investments to grow by 12.1%. The government hopes to obtain the investment grade from major credit rating agencies this year, a move that will put the country back on the investment map.
2. Tourism. Greece will set a new record in revenues and arrivals this year, breaking the previous record of 2019. Travel proceeds are expected to reach 20 billion in 2023, adding another billion euros in 2024.
At the same time, fears of a slowdown are driven by the following factors:
1. Energy. Oil, natural gas and electricity are unknown factors due to the crisis in the Middle East.
2. Inflation. The consumer price index shows clear signs of de-escalating in the last few months and could fall below 2% by the end of the year. However, a new energy shock could renew inflationary pressures.