Eurobank Greece Report - Overview of the Greek Economy 2024

Highlights from the Eurobank Greece Report Regarding the Greek Economy: Data and Challenges. February 2025:

These highlights emerge from the report, and to get the full picture, the report should be read.
Nothing written here constitutes a recommendation or directive to take any action.
The sender is not responsible for the data presented in the Eurobank Greece report, and they do not offer any recommendations.

**Highlights:**

Over the past 17 years, Greece has experienced a dramatic business cycle, both in terms of depth and duration of the great stagnation:
Recession, energy crisis, pandemic, and geopolitical tensions.

After the deep recession in 2020 and the post-pandemic recovery in 2021-2022, growth remained stable in Greece, both in 2023 and from January 2024 to September 2024, with performance exceeding that of the EU.

The unemployment rate continues to decline, supporting the increase in disposable income for households. However, significant challenges remain (high structural unemployment). In 2022, the unemployment rate stood at 12.4%.

Inflation has moderated due to the decrease in energy prices, yet it remains above the ECB's 2% target—currently, the inflation rate in Greece is 2.7%.

- MFI (the Bank of Greece, credit institutions, and electronic money institutions as defined in Law 4021/2011): Deposits in the private sector continued to rise at a strong pace in 2024, while credit from local MFIs accelerated.

After two years of high fiscal deficits due to the measures taken against the pandemic and the energy crisis, fiscal stability returned, which, combined with high nominal growth, led to a reduction in the debt-to-GDP ratio. Growth in Greece stood at 2.4% and is expected to be similar in 2025-2026.

Greek sovereign debt is rated as investment grade by 4 out of 5 approved ECAIs by the Eurozone system (DBRS, Scope Ratings, Moody’s, Morningstar, S&P Ratings, Fitch Ratings).

Government cash reserves amounted to 33 billion euros as of the end of 2024.

The current account deficit has expanded in recent years due to shocks from the global pandemic and the energy crisis, but also due to structural weaknesses in the economy.

Nearly 100 billion euros are available to Greece from EU initiatives.

Greek banks: Significant reduction in Non-Performing Loans (NPL) performance, solid profitability, and new challenges ahead, such as the government's intention to encourage competition and the establishment of a fifth banking group by merging two banks.

Innovation indices have improved but remain weak; lack of innovation clusters.

Regulatory complexity is also a barrier in otherwise attractive investment environments.

**The Way Forward: Key Challenges Facing the Greek Economy**

**Short-Term Challenges:**
- Geopolitical tensions caused by the war in Ukraine, the fragile situation in the Middle East, and Sino-American antagonism are navigating in an environment of increased and prolonged uncertainty (due to trade decisions and foreign policy of the new U.S. administration).
- Achieving a balance between significant easing in monetary policy to boost growth in the European Union and preventing renewed inflation.
- Avoiding delays in implementing investments and reforms (RFF).

**Medium-Term Challenges:**
- Addressing low-quality competitiveness and expanding external imbalances.
- Maintaining fiscal discipline and implementing reforms.
- Transitioning from a consumption-dependent growth model to an investment-based, export-oriented model.
- Attracting FDI (Foreign Direct Investment) and skilled labor in high GVA sectors to increase productivity and real disposable income.

**Long-Term Challenges:**
- Climate change and its consequences.
- The demographic challenge (Greece's population is aging, young people are leaving, and those who left during the crisis are still not returning in large numbers).