Upgrading its forecast for growth in Greece in 2021 in the region of 9% (8.8% in the official report) from 5.3% previously, however limiting its forecast for GDP growth in 2022 to 4.6% (up from 5% previously) Citigroup has launched its new monthly report on the global economy.
Domestic demand is expected to increase by 4.2% in 2021 and 3.7% in 2022, while private consumption by 1.2% and 1.9% respectively. Investment is also expected to increase by 12.5% this year and by 9.7% in 2022, with exports increasing by 12% and 10.9% respectively.
The Greek economy is entering a multi-year upward cycle of strong growth, at a time when the Greek Recovery Plan commits the largest amount of re-s as a percentage of GDP in the Eurozone that reaches 16% of GDP for the next 6 years (of which almost 10% grants).
The grants are intended to finance public investment projects, while the loans will be used to co-finance private investment based on market conditions, thus boosting gross public debt but possibly not net debt. The revenues of the Development Fund will strengthen the investments after a negative 10 years, improving together with the reforms the overall business environment.
The Greek recovery plan has a good chance of succeeding in its main goals. GDP growth will be significant – the Bank of Greece estimated at around 7% by 2026, which is almost 1.5% higher annually. Given the prolonged divestment and the scope of reforms, there is great scope and investment opportunities in the country.