OECD Forecasts 6.7% Growth for Greece in 2021

Athens, Greece. Photo source: Visit Greece / Y. Skoulas

The Organization for Economic Cooperation and Development (OECD) is forecasting the Greek economy will grow at a rate of 6.7 percent this year and 4.8 percent in 2022 driven by investments and national recovery-funded projects.

The estimates roughly fall in line with the projections made by Greek Prime Minister Kyriakos Mitsotakis, who placed the country’s growth at a rate of 4.5 percent in 2022, adding that “it might be a bit higher than that”.

According to the latest OECD economic outlook published on Wednesday, investment activity is set to increase by 14 percent this year, 17.3 percent in 2022, and 10.2 percent in 2023. 

Exports are projected to rise by 14.2 percent in 2021, 13 percent in 2022 and 5.1 percent in 2023.

Inflation is set to reach 3.1 percent in 2022, while unemployment is expected to drop to 14.6 percent in 2021 from 16.3 percent last year and even further in 2022 to 12.9 percent and to 12.7 percent in 2023.

However, OECD analysts are warning that Covid-19 and the emergence of variants such as the latest Omicron could lead to renewed travel restrictions which would put a brake on the recovery of tourism, a key driver of growth.

Global growth, meanwhile, is forecast at reaching 5.6 percent in 2021, 4.5 percent in 2022, and 3.2 percent in 2023.

OECD analysts say a main risk, is that “inflation continues to surprise on the upside, forcing the major central banks to tighten monetary policy earlier and to a greater extent than projected”.

Inflation in OECD economies is expected at nearly 5 percent, set to pull back to about 3 percent by 2023.

With regard to the eurozone, the OECD sets growth at 5.2 percent in 2021, 4.3 percent in 2022, and 2.5 percent in 2023 compared with previous projections of 5.3 percent in 2021 and 4.6 percent in 2022.

In view of Omicron, the OECD called on policymakers to be vigilant over the new strain and to speed up vaccination campaigns.