According to the National Bank of Greece, the announcement of the 2nd estimate of the Annual National Accounts by the Hellenic Statistical Authority (ELSTAT), as well as of non-financial sector accounts for FY:2023 and the publication of revised data for the years 1995-2022, provided a far more positive picture of the economy.
Specifically, GDP growth, in constant price terms, for the period 2017-2023 was revised upwards by +0.3 pps annually, to 1.9% y-o-y from 1.6% y-o-y.
The revision in nominal GDP for 2023 was significant (annual growth of 8.3% y-o-y from 6.6%), as the GDP deflator was also revised up to 5.9% y-o-y, from 4.5% in the initial estimate. Thus, nominal GDP level has reached €225.2 bn in 2023 (€220.3 bn in the previous estimate).
Stronger fixed capital investment (GFCF) was the key element of the revision, which bodes well for stronger supply-side effects going forward. Average GFCF growth, in constant price terms, for the period 2021-2023 increased to 14.9% y-o-y from 11.7%. The share of total GFCF in GDP increased to a 13-year high of 15.8% in 2023 (compared with a previous estimate of 14.3% and a euro area average of 21.2% of GDP for 2023).
The revisions for 2021-2023 comprised higher expenditure on productivity-enhancing investment categories, such as machinery and metal products as well as “other investment” (mostly comprising IT equipment and intellectual property rights).
Notably, the value of total GFCF (excluding construction) increased in 2023 to the highest level since 2008 (3rd highest annual value on record since 1995) and its share in GDP to an all-time high of 9.5% in 2022-2023, compared with a pre-crisis average of 8.6% of GDP.
Although both exports and imports of goods and services remained broadly unchanged in current price terms, the level of exports in constant prices, was lowered by c. 4.0% on average per annum, for the period 1995-2023 (to 36.1% of GDP in the revised data from 38.7%) due to the application of a higher export deflator.
Income-side data revealed a stronger household disposable income path in 2021-2023, 4.1% above the initial estimate on strengthened labor and non-labor income flows, leading to higher per capita income. This revision has exceeded the upwardly revised private consumption path, leading to a less negative households’ saving rate (-0.3%, on average in 2021-2023, from -1.7% estimated initially).
The solid performance of the Greek economy in H1:2024, with GDP growth accelerating in s.a. quarterly terms on strengthened GFCF, combined with stronger carryover effects from the revision of annual data and accelerating PIB and RRF expenditure, bode well for an annual GDP growth near 2½% y-o-y in FY:2024 and FY:2025, and a further narrowing of the investment gap from the euro area.
