Think-tank Expects 4% Growth for Greece in 2022

Syntagma Square, Athens. Photo © GNTO/Y Skoulas

The Greek economy is slated to grow at a rate of 4 percent in 2022, according to a quarterly review released by the Foundation of Economic and Industrial Research (IOBE).

The IOBE, which forecast growth for 2021 at a rate of 8-8.5 percent, also said that its baseline scenario places unemployment for 2022 at 14.3 percent.

The think tank’s forecast – lower than the government’s 4.5 percent projection – is based on stronger demand and a mild impact of rising energy costs. The Greek think tank’s analysts warn however that if the Covid-19 pandemic takes a turn for the worst, it will impact consumer sentiment and bring the growth rate down to 2-2.5 percent. 

“Recovery of the Greek economy this year is strong with an increase in real GDP that can be expected to be around 8-8.5 percent following a 9 percent decrease last year. Both this year’s recovery and last year’s recession were among the strongest in the eurozone,” said IOBE General Director Nikos Vettas.

He went on to note that recovery in large part was due to Covid support measures and grants and warned that rising energy costs and market fluctuations may affect vulnerable economies, Greece’s included.

IOBE also stressed the need to move swiftly to a new development model. “Higher growth rates in a decade, over 3 percent on average, can only be achieved by increasing productivity and further attracting productivity, a development that requires substantial reforms in the markets and the public sector,” said Vettas.