The Bank of Greece revises its forecasts for the trajectory of the Greek economy.

A few days before the release of the Interim Report on the Monetary Policy of the Bank of Greece, which includes the Central Bank's projections for the economy, the Governor of the Bank of Greece revealed that he is downwardly revising the growth forecast for 2024.

According to a report by Politico, in an interview with Bank of Greece Governor Yannis Stournaras, he stated that, according to the current estimates of the Bank, the Greek economy is expected to grow at a rate of 2.4% this year and 2.5% annually in 2023 and 2024.

In the last round of official forecasts in June, the Bank of Greece had estimated a growth rate of 2.2% for the current year, 3.0% for 2024, and 2.7% for 2025.

These figures reflect a significant slowdown in the economy after a strong recovery from the pandemic. According to Politico the GDP in the once problematic member of the eurozone recorded an increase of 8.4% in 2021 and 5.6% last year, largely due to the recovery of tourist demand after the pandemic. Even if it slows down, the Greek economy will continue to record higher growth rates compared to most of its eurozone peers.

These growth rates ensure that Greece's debt-to-GDP ratio will continue to decrease significantly. After peaking well above 200%, the public debt as a percentage of GDP has now stabilized at around 165% and is projected to decrease to 144.7% by 2025, according to the Bank's estimates.

The Bank of Greece is expected to publish its official forecasts in its regular Interim Report on Monetary Policy in December.

The updated forecasts also indicate that inflation will move on a lower trajectory. The preliminary estimate for 2023 remains at 4.3%, but it now appears that inflation will decrease to 3.5% in 2024 and 2.2% in 2025, instead of 3.8% and 2.3%, respectively, as expected in the previous projections.

The central bank's preliminary estimates are slightly more pessimistic compared to the estimates of the Greek government.