According to the Bank of Greece, economic activity continued to expand at a satisfactory, albeit slower, pace, in 2023 (2.0%), outperforming the euro area average.
Easing energy prices drove down inflation in late 2022 and in the course of 2023, to 3.2% in 2024:Q1. In the housing market, residential prices continued to increase at an accelerating pace.
Labour market developments remained positive, with unemployment declining and employment rising, though at a decelerating rate. The current account deficit narrowed significantly in 2023, after the widening in 2022, and registered a further small improvement the first two months of 2024.
The 2023 primary fiscal outcome came in at a surplus of 1.9% of GDP, significantly larger than the 1.1% of GDP target, due to higher tax revenue as well as lower primary spending. The debt to GDP ratio decreased by 10.8 pp compared to 2022 to 161.9% of GDP on account of economic growth and elevated inflation.
Since its peak in late 2022, corporate bank credit growth has moderated owing to lower loan demand but remains reasonably strong. The growth rate of private sector deposits continued to slow, under the negative impact of inflation and weaker corporate credit growth. Bank lending rates have risen notably since the second half of 2022 consistent with the tightening of monetary policy.
Government bond yields have retreated as the increasing effect coming from higher interest rates was tempered by Greece’s sovereign credit rating upgrades to the Investment Grade.
Easing energy prices drove down inflation in late 2022 and in the course of 2023, to 3.2% in 2024:Q1. In the housing market, residential prices continued to increase at an accelerating pace.
Labour market developments remained positive, with unemployment declining and employment rising, though at a decelerating rate. The current account deficit narrowed significantly in 2023, after the widening in 2022, and registered a further small improvement the first two months of 2024.
The 2023 primary fiscal outcome came in at a surplus of 1.9% of GDP, significantly larger than the 1.1% of GDP target, due to higher tax revenue as well as lower primary spending. The debt to GDP ratio decreased by 10.8 pp compared to 2022 to 161.9% of GDP on account of economic growth and elevated inflation.
Since its peak in late 2022, corporate bank credit growth has moderated owing to lower loan demand but remains reasonably strong. The growth rate of private sector deposits continued to slow, under the negative impact of inflation and weaker corporate credit growth. Bank lending rates have risen notably since the second half of 2022 consistent with the tightening of monetary policy.
Government bond yields have retreated as the increasing effect coming from higher interest rates was tempered by Greece’s sovereign credit rating upgrades to the Investment Grade.
