The Greek economy is forecast to grow by 2.4% this year and 2% in 2024, rising again to 2.4% in 2025, the OECD said in an economic survey published today.

The Paris-based organization said Greece's strong economic recovery from the COVID-19 crisis is being tested by rising energy and food prices and renewed global uncertainty.

The survey said continued policy reforms over the past few years have been a key factor behind the country's strong post-pandemic recovery and have put the economy in a stronger position to weather the current headwinds.

Gross domestic product has returned to pre-pandemic levels, helped by effective government support, a revival in tourism and exports, and improved investor and consumer confidence.

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Employment growth has been strong, creating over a quarter of a million new jobs since before the start of the pandemic, lowering the unemployment rate to a 12-year low of 11.6%.

To support the recovery, the survey recommends better distribution of public spending, strengthening public revenues, improving the functioning of the labor market and continuing efforts to create a more dynamic business sector.

"Greece's strong and targeted policy response to the COVID-19 pandemic has ensured a strong and rapid recovery. The government's 'Greece 2.0' recovery plan is already laying the solid foundations for Greece's ability to address future challenges ," said OECD Secretary-General Mathias Cormann, introducing the survey.

"Ensuring the full implementation of the ambitious reform and investment agenda will help further improve opportunities for businesses and households and will be essential for the Greek economy to navigate the current headwinds towards a sustainable growth path."

"Structural reforms are key to continued economic and social progress," the survey says, "as high energy and other key commodity prices, especially since Russia's war of aggression against Ukraine, are slowing Greece's recovery."

Inflation peaked at 12.1% in October 2022 - its highest rate in 25 years - which is weakening demand, delaying investment and holding back recent gains in purchasing power for households.

Gross domestic product growth is expected to moderate from 5.1% in 2022 to roughly 1% in 2023 and recover to near 2% in 2024. To soften the blow to inflation, the government has expanded energy and fuel price subsidies.

However, this has delayed the return of the primary budget surplus to its medium-term target of 1.5% to 2% of gross domestic product, which weighs heavily on Greece.

The share of young people in work lags behind other OECD countries, despite recent improvements. Legal reforms are improving gender equality, but, in practice, and despite progress, relatively few women earn income from work.

Greece is benefiting less than it could from the skills of its foreign-born workforce, even as employers in a growing number of sectors report increasing difficulty recruiting staff, the survey noted.

The government's reform and investment plan 'Greece 2.0' for 2021-2026 aims to address many of the economic challenges facing the country, and also set out a series of recommendations to help sustain the recovery, increase revenues and achieve transition in a net zero emission economy. /ANA-MPA