Since 2008, Greece has been viewed as one of the most struggling economies in the EU bloc. But recently, the Greek economy has gone from strength to strength. And it looks to be on the tipping point for even more growth.
Analysts at Barclays published a report earlier this year on Greece’s economic growth. They predicted that the Greece is due for a “3rd economic megacycle”. What’s a megacycle…a super turbo setting on your washing machine? In this instance, no. The Greek economy has experienced two periods previously of significant economic growth. The first took place in the 1950s-1970s; the second in the 1990s after joining the EU. But after the economy took a spectacular hit in 2008, it is looking like the Greek economy is set to go through a period of enormous economic growth again. The Financial Times dubbed it, “Greece’s transformation from economic basket case to European growth tiger”.
A look at Greece’s economic growth.
Facts & figures
Countries are given an S&P rating to determine how safe it is to invest in the country. Only 70 countries in the world have an “investment grade” rating. Greece was given a SD, “standard default” rating. However, in the last few weeks, Greece has had its status changed. First, Japanese rating agency Rating and Investment raised Greece’s status to an investment grade BBB-. Then, Scope, a European agency raised Greece to a BBB- and changed the outlook to “stable”. The reasons for this upgrade include: sustained institutional support from Europe via monetary and fiscal interventions, as well as structural reforms that have curtailed non-performing loans and more efficient banking. Read up on Scope’s decision here.
In addition, Greece has managed to reduce its debt significantly from 206% of GDP at pre-pandemic levels to 171% today.
Greece has also experienced a more prominent economic rebound compared to its European neighbours. In 2021, GDP grew by 8.4 percent. In 2022, by 5.9%. Furthermore, between 2010-2019, exports grew by 90%. While the euro area as a whole only grew by 42%.
The impact of tourism
Incredibly, tourism accounts for 20% of Greece’s GDP, which makes Greece’s economic growth all the more impressive given that 2020 to 2021 saw so many pandemic travel restrictions. As soon as the world opened up again, Greece was prepared. It announced an expansion of its seasonal budget-friendly flights earlier this year.
Unfortunately, despite such holiday promise, Greece has experienced alarmingly high temperatures of 44 degrees and wildfires in Rhodes and Corfu. In response, the Greek Prime Minister Kyriakos Mitsotakis offered everyone whose holiday had been cut short to return next year for a free holiday.
Boost in overseas buyers
Considering buying your own property in Greece? We have a wealth of properties to choose from on our portal. This is a two-bedroom villa in Crete.
For some of us, a holiday in Greece is not enough. Overseas buyers have been increasingly drawn to purchasing property in Greece, with property sales to international buyers four times higher in 2022 than 2007, according to real estate company Elxis. Greece has had a very successful Golden Visa, which is a residency by investment scheme. Recently, the minimum spend for a Golden Visa has risen to €500,00 in certain areas.
Protecting your finances in Greece
As positive as the financial outlook for Greece is, it is understandable that you might want some extra reassurance with your own finances over there. Influenced by socioeconomic events, currency markets fluctuate every day. Whether you are making a big purchase (such as that dream home in Crete) or making regular payments (perhaps the maintenance bills for your dream home in Crete), your budget will be subject to market fluctuations. To protect your finances in Greece, we recommend reaching out to out partners, Smart Currency Exchange, who will be happy to assist with your overseas transactions. They may organise a Forward Contract for you, which allows you to lock in your exchange rate for up to twelve months.
