The Greek economy has been projecting a strange sense of calm before the storm, even though the fundamentals don’t back up such a feeling. Contrary to all projections and to the incredible international instability, Greece’s gross domestic product growth held steady at 1.8% to 2% for this year, and is expected to stay that way next year as well.
On the fiscal front, we continue to generate primary surpluses, less through expenditure cuts than due to revenue outperformance. While investments are not galloping, they continue to contribute slowly but steadily to convergence with European averages, growing at a rate of 5% to 7%.
Exports are also moving in positive territory, as is unemployment (with the exception of recent quarterly data). Regarding the impact of hostilities centered around the Strait of Hormuz, the Greek economy’s swift adjustment in fuel procurement has been surprising, drastically reducing imports from Iran (located inside the Gulf) in a very short period and increasing the share of imports from Saudi Arabia and the United States. The resilience of Greek tourism has been even more surprising; apart from being undeterred by the “war climate” in our region, it also managed to extend the season with a significant increase in arrivals outside the popular third quarter – and with higher spending per visitor.
