Continued investment and reforms would support growth and help Greece to transition to a greener and more inclusive economy
Greece’s recovery from the COVID crisis has been strong
The COVID-19 vaccination rate is similar to other OECD countries
Employment is rising but requires continued efforts to ensure the young benefit
Russia supplies much of Greece’s energy but has become a minor export destination
Despite growing exports, the trade and current account deficits have widened
Greece’s goods exports are more diversified than its services exports
Energy prices are leading inflation higher, after many years of little price growth
Substantial fiscal support is being unwound gradually
Achieving investment grade could narrow Greek government bond spreads, lower financing costs and support lending
Banks will need to further improve their health if they are to finance the recovery
Stronger investment will be central to sustaining growth as the workforce ages
The economy’s rebound and rising prices have put public debt on a downwards path
Some countries sustain a primary budget surplus above 1.5% of GDP for many years
Sustained reforms and investments are needed to lower the public debt ratio
Better spending of EU funds would lift public investment
Greece’s public investment is highly reliant on European funds
Despite a decade of spending control and reallocation, Greece’s overall public spending provides limited resources to growth-enhancing areas
Improving integrity and reducing perceived corruption will require further efforts
Consumption taxes and social contributions outweigh income taxes in Greece’s public revenues
Recent reforms have reduced the labour income tax wedge
Taxes on distributed profits are low
Despite improving compliance, the VAT gap remains high
Employment rates remain low, especially among the young and women
Greece’s minimum wage is high relative to the median wage and productivity
Greece can require jobseekers to be more active in their search
Raising private investment is crucial for a sustained recovery
Larger firms can access credit at a premium, while smaller firms have little access and few alternatives to banks
The integrity of Greece’s financial system supports financial innovation
Few firms dominate many markets in Greece
Boosting business dynamism would raise investment demand and productivity
Reducing environmental regulations’ administrative burdens and better evaluating new regulations would encourage greater investment
Better management and digital skills would support digitalisation