These strong signs suggest that high GDP growth rates will continue in the second quarter as well. However, a significant challenge remains the lack of workers in key economic sectors, particularly tourism and catering. According to ELSTAT data, the number of vacant job positions skyrocketed by 115.6% in the first quarter of the year, reaching 70,826 compared to 32,850 in the same quarter last year. This alarming trend is acting as a brake on the economy’s progress. In response to this unfavorable development, the government is considering measures that will affect unemployment benefits to incentivize job seeking. These measures are expected to impact both unemployment benefits and the seasonal employment benefit received by workers in tourism and catering. ## Positive Economic Indicators The data contributing to the positive outlook for the Greek economy include:
Investments rebounded in the first quarter of the year, showing a 2.9% increase after declining by 5.7% in the last quarter of last year.
Construction Output
The construction output index rose by 5% in the first quarter of this year compared to the same period last year. Additionally, private construction activity witnessed an explosive increase of 77.8% in February (year-on-year) and 44.4% in the first two months of the year compared to the same period in 2023. * **Business Turnover:** Business turnover across the entire economy increased by 16.1% in April year-on-year. The construction sector experienced the most significant increase, with a 49.7% rise. This was followed by Mining and Quarrying with a 34.9% increase, Wholesale and Retail Trade with 18.7%, and Professional, Scientific, and Technical Activities with 26.6%. * **Improved Economic Sentiment:** The economic climate improved in May, according to the IOBE index, due to upturns in Industry, Construction, and Retail Trade. However, there was a slight decline in consumer confidence. Notably, expectations in Industry rose to 109.2 points in May from 108.7 points the previous month, exceeding the year-ago level (105.1 points).
Significant Wage Increases
A remarkable increase in wages and salaries was recorded in key economic sectors, as reported by ELSTAT data. Specifically, year-on-year increases in the first quarter of this year were 24.6% in Construction, 22.3% in Administrative and Support Activities, 16.8% in Professional, Scientific, and Technical Activities, 15.8% in Wholesale and Retail Trade, 12.9% in Manufacturing, and 16% in Transportation and Storage.
Labor Shortages On the other hand, labor shortages in key economic sectors, particularly tourism and catering, are worsening year after year. The government is therefore considering measures to remove disincentives for working in these sectors while simultaneously urging businesses in the broader tourism industry to offer better compensation to their employees. Prime Minister Mitsotakis foreshadowed these government interventions in an interview last Monday, emphasizing that unemployment benefits should not discourage people from working. The head of the Prime Minister’s economic office, Alexis Patelis, outlined the nature of the changes, stating that unemployment benefits should be linked to the salary level and years of service, i.e., the years of insurance contributions made by the employee. Regarding the seasonal benefit granted to workers in tourism and catering, he stated that it discourages job-seeking.
