In the recent Financial Times analysis, Greece is presented as the country with the most significant economic recovery in the eurozone after the pandemic, despite the fact that it remains the poorest in the zone. Greece has achieved increased growth rates, exceeding eurozone averages, supported by tourism and structural reforms that improved transparency and public financial services.
The country’s outlook improved with ratings agency S&P upgrading its outlook to “positive” as it embarked on a series of structural reforms aimed at resolving old bottlenecks and boosting growth. Greece’s growth is forecast to continue to outpace that of its eurozone peers for the next two years.
Nevertheless, Greece’s recent economic recovery has only slightly improved living standards compared to the European average, and not enough to free it from its position as the poorest in the eurozone. This challenge highlights the need for continuous reforms and long-term strategies to improve the economy and the lives of Greek citizens.
Examining Greece’s dynamic post-pandemic economic recovery through a historical lens. Although the country has been ranked among the best-performing economies in the eurozone recently, it has also become the poorest.
Last week, rating agency S&P put the country’s performance in a positive light, upgrading its outlook to “positive”. This was followed by a series of structural reforms undertaken by the Greek authorities, which aim to address chronic obstacles and boosted growth above the eurozone average, resulting in a reduction in the debt-to-GDP ratio.
This positive outlook reflects our expectation that continued tight fiscal policy will drive further reductions in the government’s debt ratio, while growth will continue to outpace its European peers.
Indeed, new data published on Monday by Eurostat showed that Greece’s government debt-to-GDP ratio fell by 10.8 percentage points, reaching 162% in 2023.
Greece’s GDP grew by 2% in 2023, outpacing Germany’s 0.3% contraction. Since 2019, before the pandemic, the country has recorded growth almost double the eurozone average. Last week, the IMF said the Greek economy would grow by 2% again this year, continuing to outpace the monetary union’s growth average for the next two years.
Increased tourism numbers — linked to improvements in the labor market and recovery in consumption — are also contributing. Structural reforms, aimed at removing obstacles to growth such as enhancing digital access to public services, speeding up judicial decisions and improving transparency and fiscal, also contribute.
However, the recent economic recovery has only slightly improved Greek living standards compared to the European average in recent years — not enough to free them from their position as the poorest in the eurozone.
Tags: Greece emerges Eurozone economic star underlying poverty
