GDP growth accelerates in the fourth quarter

GDP growth picks up: GDP growth gathered traction to 0.9% on a seasonally adjusted quarter-on-quarter basis in the fourth quarter from 0.4% in the third quarter. On an annual basis, economic growth improved to 2.6% in Q4, following the previous period's 2.3% increase and marking the best result since Q2 2023. As a result, over 2024 as a whole, the economy expanded 2.3%, matching 2023’s outturn and exceeding the prior 10-year average of 1.4%.

Government spending, investment and exports drive the improvement: On the domestic front, public consumption bounced back in sequential terms, growing 1.1% in Q4 (Q3: -1.2% qoq s.a.). Moreover, fixed investment rebounded, growing 5.3% in Q4 (Q3: -0.2% qoq s.a.) and posting a two-year high, likely buttressed by ECB rate cuts. That said, private consumption contracted 0.3% in Q4, marking the worst result since Q4 2020 (Q3: +0.2% qoq s.a.). On the external front, exports of goods and services growth improved to 0.9% in Q4 (Q3: +0.7% qoq s.a.). Moreover, imports of goods and services fell at a sharper rate of 1.7% in Q4 (Q3: -0.8% qoq s.a.), marking the fastest decline since Q1 2023.

GDP growth to remain above trend: Our panel sees the economy losing some traction in Q1 but expects 2025 GDP growth to broadly match that of 2024, remaining elevated by historical standards. Exports are expected to strengthen amid healthier EU demand, while public spending should rebound as the government slows the pace of fiscal consolidation. Moreover, fixed investment will pick up thanks to ECB rate cuts. That said, private consumption, which makes up for around two-thirds of Greece’s GDP, is expected to cool. Conflict in the Middle East and global trade policies are key factors to monitor.

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