The Greek Fiscal Council, in its Autumn Report, which was released on Wednesday, said that the Greek economy will perform positively in 2024, in an environment of geopolitical instability in Europe and the Middle East, with significant problems in key countries of the European Union.

Real GDP grew by 2.3% in the second quarter of this year, significantly faster than the eurozone average (0.9%). The momentum of private consumption and the contribution of resources from the Recovery and Resilience Fund to investment are the main drivers of growth, the EDF underlined, adding that employment increased and the unemployment rate fell to 9.3%, its lowest level since 2009, before the outbreak of the financial crisis in the country.

Workers' wages in recent years have recorded an upward trend after the long period of economic crisis and significant contraction in the Greek economy. Wage increases in recent years are undoubtedly a legitimate development in order to achieve convergence with the EU average, but these increases must be combined with productivity growth in order to strengthen the international competitiveness of the economy and avoid inflationary pressures, the Council considers.

Inflation is showing signs of improvement, with the headline rate gradually declining to 3.1% in October 2024. However, structural inflation in Greece remains higher (4.3%) than headline inflation, which, according to the EDP, requires intensive monitoring.

Budget execution for 2024 is performing positively, with the cash primary surplus at 3.54% of GDP, exceeding the target of 2.5% of GDP. Maintaining fiscal consistency is reflected in a further reduction in public debt, with the debt-to-GDP ratio projected to reach 154% in 2024, a reduction of 9.9 percentage points.

In addition, Greece's credit rating has been upgraded to investment grade by major rating agencies, which is a significant development for the financing of the economy, EDS analysts said.

In the medium term, Greece has to address fiscal imbalances, such as the demographic problem and low national savings. At the same time, high public debt and persistent current account deficits will require continued efforts to improve them.

The Greek economy enters 2025 with positive prospects, but also with significant external challenges, the EDC concludes. The need for continued sound fiscal management, aiming at a significant reduction of debt by ensuring high growth, reinforces the credibility of the economic policy pursued, both in international markets and at home.

The importance of the size of public debt and its management for the growth path of the economy is not easily understood. However, the EDC notes that it is important to highlight their importance, particularly in an increasingly uncertain international economic and political environment.