Greece’s GDP increased by a solid 2.3% y-o-y in FY:2024, outpacing the euro area average (0.8% y-o-y) for a 4th consecutive year. In Q4:2024, GDP growth accelerated to 2.6% y-o-y (0.9% q-o-q, s.a.) – the strongest annual pace since Q2:2023 – with all key expenditure components having positive contributions to y-o-y growth in this quarter.
Gross fixed capital formation (GFCF) rebounded strongly by 9.0% y-o-y in Q4:2024, contributing 1.4 pps to y-o-y growth, on the back of revived construction activity and higher spending on machinery and ICT equipment. Construction, which underperformed in 9M:2024, has resurged strongly, with residential and non-residential activity up by 29.1% y-o-y and 11.8%, respectively, reflecting strong demand conditions, progress in large construction projects, and accelerating public investment; in fact, investment was equivalent to 16.7% of GDP, the highest level in 14-years.
Private consumption growth slowed to 0.8% y-o-y in Q4:2024, but remained a key driver of GDP growth in FY:2024, rising by an average annual pace of 1.9% and contributing 1.3 pps to annual GDP growth. The main drivers were strong labor market conditions, reflected in the average increase in labor compensation by 7.4% y-o-y in Q4 and the continuing rapid fall in unemployment. These drivers are expected to continue in 2025.
The contribution of net exports in Q4:2024 GDP growth was positive (+0.2 pps), for the first time since Q4:2023, as total exports accelerated to 3.6% y-o-y in Q4:2024, outpacing total import growth, which slowed to 2.4% y-o-y. Export growth is expected to pick up to 3.4% y-o-y in 2025, from 1.0% in 2024, on improving conditions in key export markets and solid tourism trends.
Inventories (including statistical discrepancies) continued to play an important, though declining, role in GDP dynamics contributing 1.3 pps in GDP growth in Q4:2024 (-0.7 pps in s.a., q-o-q terms), following an extraordinary 3.7pp contribution in 9M:2024.
Encouragingly, latest information from leading and conjunctural indicators available for Q1:2025, point to accelerating GDP growth to about 2.7% y-o-y, according to the NBG nowcasting model estimates. For the FY:2025, GDP growth will be buoyed by a significant 1.2 pps carryover effect, combined with more supportive fiscal and monetary policy stance, as well as lower oil prices, offsetting a negative impact on Greece’s economic growth from tariff-related uncertainty for the euro area.
The above trends suggest FY:2025 growth of 2.5%, compared with a previous estimate of 2.3% (December 2024), despite uncertain external conditions.
Greece Macro Flash: GDP growth picked up further to 2.6% y-o-y in Q4:2024 raising the FY:2025 growth trajectory to 2.5%
