IMF: Greece's economic prospects improved, 2.1% growth in 2024

IMF International Monetary Fund

Greece's economic prospects have improved significantly, the International Monetary Fund says in its latest assessment

The IMF notes that following a strong post-pandemic recovery, economic activity has remained robust, with real GDP growth forecast at 2.3% in 2023 and 2.1% in 2024.

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Private consumption will be supported by positive real wage growth, while investment will continue to expand with the implementation of the national recovery program and Resilience Plan supported by next-generation EU funds.

Headline inflation is forecast to reach 2% by the end of 2025 as core inflation pressures gradually dissipate despite the continued normalisation of energy and food prices.

The banking system remained resilient, supported by strengthening the balance sheet. Asset quality improved further, with the non-performing loan ratio falling below 5% in systemically important banks.

Higher net interest margins contributed to the strong recovery in bank profits and strengthened capital adequacy. The banking system also maintains significant liquidity buffers despite the ECB's targeted long-term refinancing operations (TLTROs) repayments.

Risks are more balanced to growth but tilted to the upside for inflation. A possible escalation of Russia's war in Ukraine and the conflict in Gaza and Israel could disrupt trade, put new pressures on energy and food prices, and undermine confidence.

Conversely, accelerating ambitious structural reforms and stronger-than-expected market reactions to the recent investment grade upgrade could further improve growth prospects.

Inflation could remain high, for example, due to pressures from recent and expected wage and pension increases and weather-related shocks.

See here the IMF report.

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