The Greek economy continued to grow at a satisfactory pace in Q3 2024, outperforming the Eurozone. Domestic demand remains the main driver of economic growth (private consumption and inventory accumulation), while net exports of goods and services are declining, Eurobank notes in the new issue of its 7 Days Economy bulletin. In fact, the analysis shows that based on the Q3 2024 results, real GDP in Greece is 15.9% below its Q2 2007 peak.

Real Gross Domestic Product (GDP) in Greece in Q3 2024 increased by 0.3% compared to Q2 2024 (quarterly real growth rate) and by 2.4% compared to Q3 2024 (annual real growth rate). The qualitative characteristics of growth were similar to those of Q2 2024.

The qualitative characteristics of growth were similar to those of Q2 2024. In particular, private consumption and the change in inventories had the highest positive contribution to annual real GDP growth, while the contribution of net exports (=exports minus imports) was negative. Public consumption remained on a downward trend, while the rate of change in fixed capital formation was marginally positive on an annual basis. Real GDP in Greece in Q3 2024 exceeded pre-pandemic levels by 9.7% (4.7% in the Eurozone), while already since Q2 2023 it has been moving at higher levels than the growth trend path followed by Greece in the 3 years 2017-2019.

In terms of demand, i.e. expenditure on the purchase of final goods and services produced in the domestic economy, real GDP growth in Greece in the 9 months January-September 2024 reflects the strong increase in the change in inventories - gross capital formation increased by 25.4% and gross fixed capital formation by 2.2% - and the strengthening of private consumption (1.8%). Positive elements of the domestic labour market, such as wage and employment growth, are having a positive impact on household consumption expenditure and offsetting to some extent the effects of inflation. Taking into account the decline in the volume of retail sales, the increase in private consumption can be attributed to the service sectors (accommodation, restaurants, catering, entertainment, recreation, etc.). On the contrary, public consumption fell by 4.2% and the rate of change in total exports was marginally in negative territory as the fall in exports of goods (-2.8%) offset the increase in exports of services (3.2%). Finally, imports, driven by domestic demand, increased strongly, both in goods (5.0%) and services (7.3%). The result was a widening of the trade deficit.