Greece has outperformed most European economies in recent years, but why are citizens unable to afford basic goods and why are employers short of staff?
High growth, debt reduction and increasing investment: Greece’s economy has performed strongly over the past two years, outperforming most European countries. Greece is no longer the “black sheep” of the European family, but rather a success story of reform and recovery.
Experts, both in the country and abroad, say that even better days lie ahead.
“There are good reasons for the Greek economy to outperform the Eurozone over the next 3-5 years,” said Tasos Anastasatos, chief economist at Eurobank.
Greece’s GDP grew by 8.4% in 2021 and 5.2% in the fourth quarter of 2022.
“Among them is the large package of grants and loans from the EU Resilience and Recovery Fund, the country’s good reputation, especially in tourism, and the abundant liquidity in the banking system.”
Numbers thrive in Greece, but as is often the case in economics, the situation on the ground is quite different.
Real wages, or nominal wages net of inflation, have not followed a similar trajectory. In many cases, they have fallen due to continuous price increases.
Inflation in Greece in 2022 was 9.3%.
This situation is also reflected in the labor market. More and more employers say they have difficulty recruiting staff because workers feel wages are not high enough. Thousands of jobs remain vacant in critical sectors of the Greek economy such as food services, tourism and construction.
Unemployment in Greece in 2022 was at 11%.
At the same time, Greek consumers are forced to reduce their purchases of basic goods to cope with the wave of constant price increases.
“Let’s be honest, we have reduced some of our shopping. We buy less things. I used to buy four kilos of fruit, now I buy two or one. And our shopping is limited to just food, we don’t buy anything else,” said Evangelia who lives on her pension.
“Our sales have dropped significantly, I don’t know why, but people can’t afford to buy even the basics,” said Giorgos, a farmer’s market vendor.
With elections on the horizon, Greek citizens say inflation is their top concern and will influence their decision about which party to vote for.