Greek Economy: IOBE estimates 2.4% growth and 10.5% unemployment in 2024

Balance of unemployment flows

Greece will see an annual growth of around 2.4% in real terms in 2024 and an unemployment rate of around 10.5%, according to the assessment of the Foundation for Economic & Industrial Research (IOBE) and its quarterly report (4/2023) presented at an online press conference on Thursday.

IOBE said that the growth rate would be pushed by stronger investments and consumption of households, which would remain resilient despite inflationary pressure.

The rate of change in the general consumer price index (CPI) was set at 3.5% in 2023, up from 9.6% a year earlier. The strengthening of prices is mainly due to the positive impact of domestic demand. IOBE estimates that prices will maintain a milder upward trajectory over the full year, in the region of 2.8%, mainly due to the resilience of consumer demand.

More specifically, during the presentation of the IOBE Report on the Greek economy, IOBE's director general, Professor Nikos Vettas, stressed that the domestic economy is on a steady footing, amid mixed external influences.

In terms of domestic economy prospects, Dr Vettas noted the following:

Chronic domestic challenges and imbalances need to be addressed in order to achieve the shift in the production model. For example, (a) the labour market is characterised by high structural unemployment and a skills mismatch between supply and demand; (b) in product and service markets it is crucial to enhance competition and remove barriers to entry for new firms; (c) it is appropriate to remove disincentives to activities in the formal economy as opposed to the informal economy, (d) it is necessary to strengthen the sectoral diversification of the economy, with manufacturing as a complementary driver to tourism and construction; (e) there is a need to improve the efficiency of the public sector, with a focus on the health and education systems.

More generally, he added, there is a need to strengthen extroversion and investment as drivers of economic growth in the long term. In this context, a short-term opportunity is the timely and efficient use of the resources of the Recovery and Resilience Fund.

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