Greece Economy Not Expected to Recover Pre-Crisis Levels Until 2030s: Report

10:47 14/5/2025 - Πηγή: iEfimerida

Greece’s per capita GDP is not projected to return to its pre-crisis levels of 2007 until the early 2030s, according to a new report by the Parliamentary Budget Office (PBO).

The analysis outlines two potential growth scenarios, highlighting the challenges and opportunities facing the Greek economy over the next decade.

In its report, the PBO examined

Greece’s macroeconomic prospects, emphasizing the significant uncertainties surrounding future growth. Under a conservative scenario, with annual investment growth of 4% and labor productivity rising by 1.38% per year, Greece is projected to regain its 2007 per capita GDP level by 2032.

The productivity rate remains below the historical average of 1.46% recorded from 1974 to 2007. A more optimistic scenario assumes stronger investment growth of 6.6% per year and labor productivity increasing by 1.85% annually.

Under these conditions, Greece could reach its 2007 per capita GDP level by 2030, two years earlier than the conservative estimate.

Both scenarios underscore the importance of boosting productivity, attracting investments, and increasing capital per worker to achieve sustainable growth.

The PBO stressed that intensifying structural reforms is essential for fostering a more dynamic labor market and ensuring long-term competitiveness.

The report also revisited the profound impact of Greece’s economic crisis (2008-2016), describing it as one of the most severe and prolonged in the developed world. The real GDP contracted by 26.6% during the crisis, a scale comparable to the Great Depression in the United States (1929-1933).

The cumulative GDP losses reached 59.1% when compared to pre-crisis projections, driven by plummeting productivity, soaring unemployment, and negative capital accumulation.

The PBO outlined five distinct economic periods in modern Greek history:

The Great Expansion (1960-1973):Rapid industrialization and modernization boosted GDP growth to 8.58% annually.Long Stagnation (1974-1993): Oil crises, political instability, and structural weaknesses slowed growth to 1.51% per year.Mild Expansion (1994-2007):EU convergence, financial liberalization, and balanced growth (3.60% annually).Greek Crisis (2008-2016): Severe contraction averaging -3.30% per year, driven by debt, austerity, and collapsing investments.Recovery (2017-2024): Gradual rebound at 1.95% annual growth, aided by reforms, EU funds, and employment gains.

Since 2021, recovery has accelerated thanks to reforms and investments supported by the EU’s Recovery and Resilience Facility (RRF).

However, structural challenges persist, including demographic decline and uncertain investment momentum.

The PBO’s report underscores that while Greece has made significant strides since the crisis, maintaining high investment levels and advancing reforms remain critical for closing the gap with its pre-crisis economic performance.

By Yiorgos Pappous

Διαβάστε περισσότερα στο iefimerida.gr

Διαβάστε ολόκληρο το άρθρο >>

Keywords