ATHENS, Nov 14 (Reuters) – Greece’s economy is expected to expand by 2.5% this year due to strong domestic demand, investments and European Union funds but growth will slow to 2% next year, the International Monetary Fund said on Tuesday.
The Fund’s 2023 estimate is higher than that of the Greek government, which puts growth this year at 2.3%.
The IMF, one of Greece’s official lenders during its debt crisis which erupted in late 2009, said that economic activity had been strong in the first half of the year.
“High frequency data suggests that overall economic momentum remained robust in the third quarter despite a series of natural disasters,” it said in a statement concluding its visit to Athens.
Greece was hit by wildfires and a deadly rainstorm that killed 16 people, damaged homes, businesses and roads and wiped out crops and animal farms in its Thessaly region. The total cost of the impact is estimated at more than 1 billion euros.
Investments are seen benefiting from more than 55 billion euros that Athens will receive in EU structural and recovery funds in the coming years.
“However, against the backdrop of demographic headwinds, the expiration of Next Generation EU funding in 2026, and still low potential growth, GDP growth is forecast to moderate to about 1¼ percent in the medium term,” the Washington-based Fund said.
Greece needed three international bailouts totalling more than 260 billion euros to stay afloat during its decade-long debt crisis. Since exiting the bailouts in 2018, it has relied solely on bond markets to cover its borrowing needs.
Athens last year paid off the IMF, which had provided it with 28 billion euros in 2010-2014.
Source : Reuters