Greek Central Bank Chief Says Tourism, Exports Driving Growth

Athens, Greece

Brexit concerns, increasing taxation and a slowing EU economy may impact export activity and tourism, taking a toll on Greece’s growth outlook, said Central Bank Governor Yannis Stournaras addressing on Monday, the bank’s 86th annual shareholders meeting.

The Bank of Greece released its annual report on the economy which forecast 1.9 percent economic growth this year, below the government’s 2.5 percent forecast.

Yannis Stournaras. Photo source: Bank of Greece / © Athens News Agency

According to the bank governor, factors that contributed to growth in 2018 were a rise in exports of goods and services as a result of improved international competitiveness and excellent tourism performance with rising revenue from travel services; increased private consumption backed by a stronger household disposable income due to the increase in employment; and the export-oriented manufacturing sectors maintaining their momentum, with total industrial production rising, albeit with a slower pace, and the stabilisation of the property market.

Stournaras referred to increased investor interest in Greek properties, driven in large part by the “excellent performance” of the tourism industry in the last few years and by the gradually growing demand for all sorts of accommodation options with particular emphasis on the luxury market.

The increasing demand for travel to Greek destinations, Stournaras said, is also raising the bar in terms of quality, while opening up to more higher spending travelers compared to the past. Indicatively, over the 2012-2018 period, the number of luxury beds increased by 52.8 percent, with average occupancy levels exceeding 50 percent countrywide and in Attica, the Hellenic Chamber of Hotels (HCH) found.

Furthermore, the number of beds is expected to increase further in the next two years based on projected construction activity in the hotel sector.

Paleo Faliro, Athenian Riviera / Photo © NIKOS DANIILIDIS – Wikipedia

Athens alone will see the development of at least 10 units in the immediate future, with interest peaking for older buildings, mainly offices, along Syngrou Avenue and on the coastal front of Attica, the so-called Athenian Riviera.

The bank report also found that services related to tourist activity with potential for further growth include accommodation and catering services, travel agencies and transport (excluding maritime and land transport), adding that further development involves the creation of new destinations, attracting higher-spending travelers, better distribution of tourists per destination per year, and setting limits on tourism-related activities such as short-term rentals.

The report adds that special interest tourism products such as meetings or conference tourism can also contribute to sustaining the sector’s dynamic.