### Summary
In its latest report on Greece, HSBC highlights the country's major reform story, emphasizing the shift towards exports and investments for a more sustainable economy.
### Facts
- 💼 Greece's economic model has undergone significant changes, with a greater focus on exports and investments.
- 📈 The country's economic prospects are now more promising and sustainable compared to the past.
- 🇪🇺 The report discusses Greece's debt crisis, which resulted from loose fiscal policies, leading to an explosion in domestic demand and a subsequent increase in borrowing costs and debt.
- 💵 As a member of the eurozone, Greece was unable to depreciate its currency, so it had to achieve competitiveness by decreasing wages.
- 📉 Initially, keeping wages low contributed to deflationary trends and a decline in the economy, leading to high unemployment rates.
- 📈 However, Greece has experienced a boost in exports, narrowing the balance of payments gap and achieving historical highs in investment and foreign direct investment (FDI).
- 💪 Faster growth, driven by exports and investments, will contribute to a quicker reduction of the debt, which benefits from a long maturity and low interest rates due to a deal with creditors.
- 💡 The report emphasizes that Greece's economic model is no longer solely dependent on fiscal policy.
Greece's economic model has undergone a significant reform, with increased emphasis on exports and investments, leading to better and more sustainable prospects for the economy, according to HSBC's latest report.
Greece's inflation rate rose to 3.5% in July, but it still remains the sixth lowest among EU members, with higher inflation rates observed in other countries such as Belgium, Luxembourg, Spain, Cyprus, and Denmark; however, Greece does have the ninth highest inflation rate in food compared to other EU nations.
Tourism revenue in Greece is on track to exceed €20 billion this year, surpassing the record set in 2019, with first-half revenue reaching €6.174 billion, a 14.1% increase from the same period in 2019.
While Greece aims for a primary budget surplus of 2.1-2.5% of GDP in the coming years, the EU calls for a minimum surplus of 2.3% to reduce the country's debt, with the government focusing on pro-growth policies and reforms instead of handouts and tax cuts.
Europe is facing economic challenges including rising inflation and energy crises caused by Russia's invasion of Ukraine, but there are signs of slow recovery and easing inflation in the future, providing opportunities for businesses like Nestle SA, Unilever plc, and PepsiCo, Inc. This article also provides a ranking of the richest to poorest countries in Europe by GDP per capita (PPP).
Germany, once hailed as Europe's economic powerhouse, is now facing structural problems and could be on the verge of decline, according to experts, with factors such as stagnant GDP, high inflation, an aging population, overdependence on exports, and underinvestment contributing to its current predicament.
Europe's economy is facing trouble as interest rates rise and debt servicing costs increase, particularly in the eurozone where the European Central Bank will struggle to provide support due to the constraints of the euro; fiscal deficits and breaches of budget deficit limits persist, with countries like Italy and France openly defying spending cuts, while Germany's reluctance to break from balanced budgets and increase investment spending exacerbates the contracting economy.
