The Economist Intelligence Unit (EIU) keeps its forecast for the growth of the Greek economy unchanged at 4% in 2022, although it has revised for the worst the corresponding estimates for the global and European economy, in the shadow of the war in Ukraine and galloping inflation in food and energy prices.
Referring to the “Greek exception”, during her speech at the 26th Annual Economist Roundtable, the EIU’s director for Europe, Joan Hoey, pointed out: “We forecast 4% growth for the Greek economy this year, following growth around 8% last year (…).
The Greek economy will be hit, but household consumption will also be hit, due to inflation in food and energy (…), growth will be supported by a possible year for Greek tourism.
There is a lot of (tourist) demand in Europe and Greece will be one of the main beneficiaries. That’s the one thing. The second is access to EU recovery funds.
The Greek authorities have done very well in implementing this program and there is already a large disbursement of resources that will support the economy this year and in the years to come.” According to Ms. Hoey, Greece is not doing better than other countries.
Forecast for 2.2% growth in the eurozone
Referring to the forecast for Europe and the eurozone, during a discussion with Daniel Franklin, the Economist’s diplomatic editor, Ms Hoey pointed out that the region as a whole would be hit harder, taking a hit of almost 3%.
“Our forecast for the eurozone at the moment is for (growth) 2.2%, whereas before the war started we had a problem of 4%. What we saw at the beginning of the year is a very strong carry-over effect, recovery from the pandemic in the 4th quarter (of 2021), which was carried over to the 1st quarter (of 2022)” he noted and added that this means that even if growth slows “to nothing” for the rest of the year, there will still be signs of recovery and “actually, historically speaking, 2.2% growth in the eurozone doesn’t sound that bad.”
Regarding the global economy, Ms. Hoey pointed out that based on the EIU’s estimates of about 1 trillion. dollars will be lost this year from global growth, with its rate shaping up to 2.8% in 2022, against the problems of 3.9% before the war. He also reminded that, in addition to the enormous geopolitical effects of the war in Ukraine, its economic counterpart is quite large, especially for Europe, with the negative consequences manifesting in three areas: the sanctions that are expensive, the disruptions in the supply chain and uncontrolled inflation, affecting households and businesses.
The outlook of the Russian economy
In the meantime, answering a question about the outlook of the Russian economy, Ms. Hoey emphasized that it may appear quite resilient for the time being, mainly due to the very large sums that Russia still receives from the sale of oil and especially gas, with as a result the ruble has recovered “very strongly”, but in the medium and long term they will be very negative.
“The Russian economy will take another 10% hit this year in terms of GDP growth, a contraction of 10% on an overall basis. I think there is no doubt that in the medium and long term the losses to the Russian economy will be truly incalculable. Russia will be effectively disconnected from the Western economy and over time the loss of tickets will really begin to be seen in Russian industry,” he concluded.
For his part, Alasdair Ross from the Economist – The World Ahead stressed that although there is a sense that most of the road has been traveled with the pandemic, it is not unlikely that Covid-19 will be “with us again in the winter, affecting and again the global economy. “I don’t think it’s over yet,” he said.