NBG: Greek businesses on a positive path in 2024.

Greek businesses expect continued strong growth in 2024, with construction and information technology leading the momentum based on Recovery Fund resources. The Greek business sector continued its upward trajectory in the second quarter of 2023, according to a study by the Economic Analysis Directorate of the National Bank of Greece (NBG). Despite the challenging international environment and the catastrophic effects of climate change in the country, NBG analysts estimate that Greek businesses will remain resilient, gradually accelerating in 2024, in parallel with the allocation of Recovery Fund resources in the economy.

More specifically, business sales in the second quarter of the year marked a year-on-year increase of 5.5% in deflated terms. Despite the slowdown from the first quarter (8.1% annualized growth), performance remains higher than the previous growth phase (1.5-2% per year between 2001 and 2008). This positive picture is supported by a number of relevant indicators such as employment (+9.8% annualized in the first seven months) and investment (+8% annualized in the second quarter).

Focusing on sectoral performance, it is extremely positive that in the dynamic sectors of construction and information technology, Greek companies continue to gain share in the European market. Increased investment needs in these sectors (also supported by the Recovery Fund) boosted demand in their broad clusters - with dynamic performance in sectors such as real estate, architecture and research and development (reflecting the transformation path of the Greek economy).

A relative deterioration was noted in the retail (mainly food) and transportation sectors, which continue to experience high inflationary pressures with negative implications for demand and profit margins. Meanwhile, the industrial sector came under pressure (-1% in deflated terms), mainly influenced by weak demand in Europe compared to the previous decade's average of 1.7%. However, it is worth noting that industry has the highest recovery rate in the EU, having already recovered 40% of what was lost due to the economic crisis (while other sectors have recovered 20%).