Greece’s Central Bank Sees Slower Tourism Growth in 2023

Photo source: Greek Travel Pages.

Inflationary pressures, the ongoing Russia-Ukraine war and the cost-of-living crisis are set to impact Greece’s tourism performance this year, according to the latest report released by Bank of Greece Governor Yannis Stournaras.

According to the report released on Friday, the Greek economy is set to expand by 2.2 percent in 2023, a forecast revised upward from the previous 1.5 percent growth projection and from 5.9 percent in 2022.

Addressing the central bank’s annual shareholders’ meeting, Stournaras said Greece’s strong tourism dynamic would continue into the year but at a slower pace with higher costs affecting traveler trends and spending.

Bank of Greece Governor Yiannis Stournaras. Photo source: BoG.

Two key challenges ahead are the diminishing disposable income of travelers impacting their options and the need for Greece’s tourism sector to find ways to remain resilient and competitive through innovative and more sustainable approaches.

According to the central bank, travel receipts in nominal terms increased by 68.3 percent in 2022 compared to 2021, recovering 97.2 percent of corresponding 2019 receipts. In real terms however, the increase in 2022 came to 48.9 percent over 2021, with a 90.2 percent recovery rate at constant prices. In 2022, the number of non-resident arrivals rose by 89.3 percent over 2021, with a recovery rate of 88.8 percent.

Overall compared to rival markets, Greece ranks fourth in terms of arrivals after Spain, Italy and Turkey, having increased its share of arrivals in relation to competing countries (Spain and Italy).

Stournaras said headline inflation would remain at high levels but was set to ease to 4.4 percent. The BoG chief confirmed the government’s projection for a primary surplus of 0.7 percent this year.

“The biggest risk for Greece’s economic prospects in a period of successive crises and increased uncertainty would be a loss of credibility regarding the economic policy implemented, which was so hard to regain, and a return to the bad practices of the past,” said Stournaras, adding that Greece must move forward with credible policies to safeguard its economy from risks including the impact of the energy crisis and a potentially protracted electoral period.