The Greek economy’s growth rate in the year’s first quarter proved to be higher than the market expected, coming at 2.1%, and bringing much optimism to the government, since the corresponding rate in the European Union was a meager 0.4%.
However, its qualitative characteristics do not allow for to much enthusiasm, as the main driving force was once again consumption, together with inventories, while investment increased but only at a low rate, and the external balance was negative.
Compared to the fourth quarter of 2023, gross domestic product increased by 2.2%.
Final consumer spending increased by 1.1%, with household spending making the biggest contribution as it rose by 2.2%, while that of the general government fell by 4%. Gross fixed capital formation increased by 2.9%, while the government’s target for investment growth in the whole year is 9.1%, based on the Stability Program of last April.
Overall gross capital formation, including inventories, increased by 23.3%, showing that it was mainly inventories that increased.
Exports of goods and services decreased by 5.7%, due to the decrease of exports of goods by 8.8%. Exports of services increased by 1.5%. Imports of goods and services increased by 3.1%.
According an analysis by the National Bank of Greece, this Q1 performance indicates a dynamic continuation and is compatible with the forecast for an annual growth rate of 2%-2.5%. It is noted that the government foresees a rate of 2.5% in the Stability Program for the entire 2024.
Among investments, NBG said the biggest contributors were the mechanical equipment and transport sectors, which rose by 6.8% and 7.8% respectively.
National Economy and Finance Minister Kostis Hatzidakis said the first-quarter figures “confirm the correctness of the economic policy and lay the foundations for the achievement of the development, fiscal goals of the year. The Greek economy continues to grow at a rate multiple times higher than the EU average.”
