NBG Economic Analysis’ nowcasting model points to an acceleration in GDP growth, based on the latest information available from monthly indicators for the first months of 2024.
The model’s projection is corroborated by survey data and conjunctural indicators of business activity which point to increasing production and fixed capital investment, following the slowdown experienced in Q4:2023. Specifically:
- The economic sentiment indicator for Greece surged to 7-month high of 108.4 in March 2024 from 105.6 in Q4:2023
- Business confidence in the services sector increased to 38.1 in Q1:2024 from 32.8 in FY:2023
- Construction confidence firmed to 13.2 in Q1:2024, compared with an average of 0.5 in FY:2023, on the back of robust order books
- Industrial confidence edged up to 4.8 in March; a 13-month high
- The manufacturing PMI for Greece spiked to a 2-year high of 56.9 in March 2024 (remaining the highest in the euro area)
Production and investment-related conjunctural indicators are also pointing to stronger investment activity in Q1:2024:
- PIB expenditure (including RRF) was up by 55.8% y-o-y in 2M:2024
- Capacity utilization rate in the services sector increased further to 93 in Q1:2024, from 88.4 in FY:2023
- Employment growth accelerated to 2.3% y-o-y in 2M:2024, from 1.2% in Q4:2023
- Electricity consumption by industrial customers (high voltage consumers) rose by a robust 6.8% y-o-y in 2M:2024, compared with annual declines of 2.1% y-o-y in Q4:2023 and 4.9% in FY:2023
- The issuance of construction permits by the private sector climbed to a 13-year high of 8.5K cubic meters in Q4:2023 (+12% y-o-y), pointing to a substantial construction-related push to GFCF in 2024
Moreover, demand-related indicator trends point to still solid private consumption and service exports:
- New passenger car registrations increased by 63%, in m-o-m terms, in January 2024
- Turnover of businesses subject to double entry bookkeeping picked up to 1.1% y-o-y (in constant price terms) in January 2024 from -0.4% in Q4:2023 (excluding energy producing activities & financial services)
- Inbound tourist arrivals and revenue were up by 16% and 27.3% y-o-y, respectively, in January, while international arrivals to the Athens International Airport rose by 19.4% y-o-y in Q1:2024
The combined impact of the above factors points to an acceleration in Q1:2024 GDP growth to 1.7% y-o-y, according to the latest update of NBG Economic Analysis’ nowcasting model. For the full year, GDP growth is estimated at 2.5% y-o-y.