Greece: economy set to grow 2% in 2024 as tourism and wage increases support, says OECD report
The Greek economy is projected to maintain its resilient trajectory, growing by 2% in 2024 and 2.5% in 2025, fueled by strong tourism, rising employment, and increasing real wages, as detailed in the latest OECD report.
Greece’s sustained growth despite labour market challenges
Although the pace of new job creation has slowed, Greece continues to experience historically high employment rates and labor force shortages.
This persistent demand for labor in the Greek market underscores the economy’s underlying strength despite broader European economic challenges.
Wage increases and consumer spending
Significant wage growth has been recorded in Greece, with wages rising by 5.5% annually in the last quarter of 2023.
The minimum wage saw a substantial increase of 9.4% in April 2023, followed by another rise of 6.4% in April 2024.
These wage increases are likely to bolster consumer spending, further stimulating the economy.
Investment driven by EU funds and banking improvements
The OECD report highlights that investment in Greece is expected to surge by 9% in 2025.
This optimistic forecast is supported by the effective use of Recovery and Resilience Fund resources and continued enhancements in bank soundness, despite the prevailing tight financial conditions.
Inflation likely to decline in Greece
Inflation in Greece is set to continue its decline, albeit at a slower rate, with an expected drop to 2.1% by the last quarter of 2025.
The Greek government is also anticipated to achieve a primary surplus of 1.8% of GDP this year and 2.1% in 2025, which is crucial given the country’s high public debt levels.
Public debt is projected to decrease to 151% of GDP in 2025, down from 161% in 2023, thanks to economic growth and advances in combating tax evasion.
Challenges ahead: Productivity and fiscal adjustment
The main hurdles for the Greek economy remain enhancing productivity and adjusting fiscal policies to manage the high debt levels.
The OECD points out that Greece’s productivity growth is a third lower than the average across OECD countries, which could potentially limit economic expansion and improvements in living standards.
Strategic focus for sustained growth
To sustain its economic growth and manage the high expenditure required due to historical underinvestment, demographic changes, and climate response, Greece will need to focus on boosting productivity.
This approach will not only create more fiscal space but will also elevate the standard of living across the country.
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