Business sector sales recorded positive performance of c. +3% (in real terms) during Q2 and Q3:2024, leaving behind the low performance of the previous twelve months (+1.4%). However, the improvement was not uniform, as we could detect three distinct groups (all trends in the following analysis are in real terms):
- The drivers of the upward trend (½ of the sector): These are export-oriented sectors (i.e., manufacturing, transport and wholesale trade) that benefited from export recovery. They returned to growth (+3.4% in Q2 and Q3:2024) after twelve months of subdued performance (-1.2%).
- Consistently robust pillars: (a) sectors supporting entrepreneurship and investments (margins but construction and IT), which have achieved an average growth rate of approximately 8% over the past 1½ years, and (b) tourism cluster, which continues to post strong performance, particularly during the low season, with growth rates of c. 5% over the same period.
- In contrast, retail trade has faced contractionary pressures of approximately -3% over the past 1½ years (particularly in durable goods), driven by consumer adjustments to the new, higher price levels.
In this context, we estimate that the business is set for a sales growth of c. 2.8% in 2024 (similar to 2023 performance), as Q4 continues the momentum of Q2 and Q3 (in line with preliminary data for October). This performance enables Greek business sector to continue their slow but steady market share increase in EU value added (1.05% in 2024 vs 1.01% in 2022), however, there is still room to recover its pre-crisis shares (c. 1.8% during the period 2001–2009). It is noteworthy that Greece ranked in the 6th place among the EU countries in terms of Q3 value added performance.
Looking ahead, we think that the Greek business sector is well-positioned to achieve healthy performance in 2025, with an expected growth of around 3%, as:
- Robust pillars of investment-supporting sectors and tourism have room to take advantage of the acceleration of Recovery Fund flows and latest trends in international demand.
- Sectors that led the growth of the last six months, are expected to maintain their dynamic, with exports continuing their recovery despite international challenges.
- Stabilization is expected for retail trade, as consumers are expected to gradually adjust to the new price within 2025.
However, it should be considered that next year's drivers – extroversion and investment – while offering significant growth potential, they are also vulnerable to (a) the growing uncertainty of the international environment, with possible adverse developments on multiple fronts of geopolitical tension posing risks to export, tourism and investment prospects, and (b) the challenges of the digital and green transition, that set new competitiveness standards, making it more urgent than ever for businesses to quickly adapt to the new state of play.
See the infographic:
