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Forecasts for the Greek economy show growth in 2024 ranging from 2.3 to 2.9%, much higher than the European average expected at 1.2% according to the Commission. Inflation is expected to decrease further in 2024, although for Greece it will fluctuate a little higher than the rest of Europe mainly due to food prices and imported inflation. Also positive news is that the ECB, after raising interest rates for two consecutive years at historically high levels, is expected to make reductions at the end of the second quarter. This will have the effect of supporting incomes and consumption.
After the successful year of 2023, the new year started just as strongly and continues. The return of the Greek economy to investment grade by international rating agencies caused positive reactions among international investors. A big rise in stock market turnover was recorded in the first quarter of 2024 with stock market gains hitting a 15-year high of 9.99%. The positive developments of recent years in the economy as well as structural reforms have an impact on the establishment of new businesses. The first quarter saw a 13-year record number of new business start-ups.
The fiscal space freed up by growth rates, primary surpluses as well as additional tax revenues of the state enables the government to take measures in favor of workers and businesses. Since the beginning of the second quarter, there has been an increase in the minimum wage by 6.4% and stands at €830. With the 14 payments made over time, the salary on a monthly basis reaches €968.33. This concerns approximately 600,000 workers. The government's plan until 2027 is to raise the minimum wage to €950, that is, on a monthly basis with the 14 payments per year, it will reach €1,108.33. The economy minister also announced a new reduction in employers' insurance contributions, but it is expected at the end of the year.
In the tourism sector, the messages from the beginning of the year are now positive. Great increase in the number of tourists and the money spent by them for the month of January continuing the positive 2023. According to the Bank of Greece, we had a 16% increase in arrivals and a 27% increase in receipts in a traditionally non-tourist month for Greece, which creates huge optimism. Everything shows that in the new year tourism can move higher than in 2023 as long as the difficult geopolitical conditions are favorable.
Another sector that needs attention due to the latest decline is exports. The government staff announced a program to boost exports based on the following axes: - Utilization of European funds from the Recovery Fund and the new NSRF - Facilitation of the digital transition of businesses - Further development of sectors where we have a comparative advantage, such as agri-food, the pharmaceutical industry and the production of energy from renewable sources -Further consolidation and strengthening of the robustness of the banking system.
The second quarter is moving particularly positively despite the great uncertainty in geopolitics and energy.
