Greek economy grew by 2.2% in January-March - But falling investment risks achieving annual target
The Greek economy grew by 2.2% in the first quarter, preliminary data from the Hellenic Statistical Authority (ELSTAT) showed. At the same time, investment fell by 3.2%, raising questions about the feasibility of the 8.4% growth target set by the budget for the full year.
This rate of 2.2% is certainly higher than the 1.5% of the eurozone and 1.6% of the EU. However, on a quarterly basis, Greek GDP was almost stagnant, growing by 0.04%, while the eurozone expanded by 0.6%.
The National Bank has revised its forecast for the growth rate this year from 2.4% to 2%, while the government and the Bank of Greece predict 2.3%.
According to ELSTAT data on an annual basis, consumption was again the main driver. Total consumer spending increased by 1.9% from the first quarter of 2024 and those of households, in particular, increased by 1.6%.
According to economists, "since investments receive contributions from the execution of Recovery and Resilience Fund projects, this indicates a weak development of private investments."
Also, data on individual categories of gross fixed capital formation indicated that the decline compared to the previous quarter came mainly from housing (-18.7%), mechanical equipment such as weapon systems (-8.1%) and other construction (8.5%). Only transport equipment (+6.8%) recorded a positive movement.
In terms of production, real gross value added decreased by 0.4% on a quarterly basis, mainly due to the construction and real estate management sectors.
According to a note from the National Bank on GDP data, investments were lower than expected, with almost all categories recording a decline on an annual basis.
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