• Mon. Sep 25th, 2023

Daniel’s Impact on the Economy: A Costly Toll


Sep 18, 2023
Daniel’s Impact on the Economy: A Costly Toll

Almost two weeks after the catastrophe caused by Daniel, the government and economists are still grappling with estimating the extent of the damage. The difficulty lies in the fact that a comprehensive record has not been made of what has been lost forever under the waters. Moreover, there is uncertainty about whether the fields will be cultivated again, if the destroyed production units will reopen, if flood victims will return to their homes, and if the products will regain their place in foreign markets.

Fortunately, there is currently 2.85 billion euros available for recovery efforts. This includes €600 million from the supplementary budget for immediate aid to households and business compensation, as well as €2.25 billion expected from Brussels in 2021 and 2024. With this funding, the state has the resources needed to begin the difficult process of recovery.

However, in order to secure EU funding, it is crucial that roads, railways, sewage networks, and anti-flood and anti-erosion measures are designed and implemented correctly and efficiently. Unfortunately, the Greek state is not known for its speed and efficiency in such endeavors. These infrastructure projects must be completed quickly in order to access the necessary funding.

While the blow to Thessaly, which contributes 5.2% of GDP and 14.1% of agricultural production, is projected to be manageable, there are still concerns about the effects on the overall economy. Inflation, GDP, and the balance sheet are areas of concern. The forecast for 2023 overall will not be significantly impacted, but there are worries about the situation in 2024.

Bank of Greece chief economist Dimitris Malliaropoulos explains that the catastrophe will have a negative impact on GDP, inflation, and the balance sheet. He estimates that growth in the fourth quarter will be around 1% due to the situation in Thessaly.

In conclusion, while the catastrophe has caused significant damage, the state has the resources to begin recovery efforts. However, there are challenges ahead, including the need for efficient infrastructure development and concerns about the impact on the economy in the coming years.