Greece is a country often associated with its turbulent financial history. 

A decade ago, it teetered on the brink of financial collapse.

Today, it is one of the fastest-growing economies in Europe, regularly outperforming the Eurozone average since the pandemic.

However, the country’s economic growth has not translated into meaningful improvements in the living standards of its citizens.

In a 24-hour general strike on November 20, thousands of Greek workers protested across the country, with disruptions in shipping, transport, and public services.

Protesters demanded immediate government action to protect their purchasing power, which has been eroded by inflation far outpacing wage and pension increases.

A decade of debt and recovery

Greece’s economic challenges date back to its sovereign debt crisis from 2009 to 2018.

During this period, Greece borrowed over €280 billion in bailout funds from its European partners and the International Monetary Fund (IMF).

In return, it implemented harsh austerity measures, slashing wages and pensions and privatizing public assets. By 2020, its debt-to-GDP ratio peaked at an astronomical 207%.

Fast forward to 2024, and the picture looks dramatically different.

Greece has regained investment-grade status and reduced its debt-to-GDP ratio to 162%, with further reductions to 149% expected by 2025 and 133.4% by 2028.

For a country once deemed the Eurozone’s weakest link, this is a remarkable turnaround.

But this recovery has come at a cost. The austerity measures implemented have wiped out a quarter of its economic output.

And while GDP has rebounded, wages and living standards have not kept pace.

Growth that hides inequality

Greece’s economic growth is undeniably impressive. Over the past few years, Greece has consistently outperformed its peers, with robust public and private investment driving its recovery. 

The IMF predicts GDP growth of 2.3% in 2025, more than double the Eurozone average of 1.3%.

This growth is the result of fiscal discipline. Greece has prioritized reducing its debt through early repayments, with the finance ministry planning to repay €8 billion of bilateral debt between 2026 and 2028. 

These measures have boosted investor confidence and lowered borrowing costs, with the yield premium on Greek bonds now at its lowest since 2008.

Despite the booming economy, however, Greece remains one of the poorest countries in the Eurozone. According to OECD data, purchasing power is among the lowest in Europe, with only Bulgaria ranking lower.

The minimum gross monthly wage has risen from €650 in 2019 to €830 today and is set to reach €950 by 2027.

But for many Greeks, these increases are insufficient to offset the rising costs of food, energy, and housing.

Workers report that their purchasing power has been reduced by as much as 50% compared to pre-crisis levels.

Why is inflation hitting workers so hard?

Inflation affects everyone, but its impact on workers is especially pronounced when wage growth lags behind rising costs. 

According to Greece’s largest private-sector union, GSEE, basic goods are increasingly out of reach due to practices by “oligopolies” that keep prices artificially high.

For instance, energy prices—already elevated across Europe—have been particularly challenging in Greece, where lower wages amplify the burden on households.

While the government has reduced taxes on certain goods and services, unions argue that these measures have not been enough to offset the cost-of-living crisis.

How has the government responded?

The Greek government has acknowledged these challenges but insists that fiscal discipline remains essential.

Finance Minister Kostis Hatzidakis recently emphasized the importance of maintaining primary surpluses and reducing debt to attract investors and ensure long-term stability.

The 2025 budget reflects this approach. It includes €1.1 billion in additional spending to fund wage and pension increases while projecting GDP growth of 2.3%.

The government has also raised the minimum wage four times since 2019 and increased pensions to support vulnerable groups.

Prime Minister Kyriakos Mitsotakis has called on the European Union to address disparities in power prices across member states, arguing that high energy costs are disproportionately affecting countries like Greece. 

However, critics argue that these measures fall short of addressing the root causes of Greece’s economic inequality.

Lessons from the crisis

Greece’s economic recovery offers valuable lessons for other countries navigating post-crisis environments.

First, fiscal discipline and structural reforms can deliver results, as evidenced by Greece’s debt reduction and improved investor confidence.

But Greece’s experience also highlights the risks of focusing too heavily on macroeconomic indicators while neglecting the lived experiences of ordinary citizens.

Rising GDP figures mean little to workers whose wages have stagnated and whose purchasing power has eroded.

For Greece to achieve sustainable growth, it must find a way to combine fiscal responsibility with policies that address inequality.

This includes tackling inflation, strengthening social safety nets, and ensuring that wage increases keep pace with living costs.

What’s next for Greece’s economy and workers?

Greece’s ability to overcome these challenges will determine the long-term success of its recovery. 

While the country’s economic turnaround is impressive, its citizens are still grappling with the legacy of austerity and the pressures of rising inflation.

As Greece enters its next phase of recovery, the government must focus on ensuring that growth benefits everyone—not just investors and creditors. For a country that has already overcome so much, this is the next step in building a truly resilient economy.

The post Greece’s economic recovery paradox: growth rises, living standards fall appeared first on Invezz

Wall Street is gearing up for a potential resurgence of inflation as President Donald Trump prepares for his second term, backed by Republican control of Congress.

Investors face a complex landscape of rising inflation expectations, soaring stocks, and uncertainties tied to Trump’s policy agenda, including taxes, tariffs, and immigration.

Rising long-term bond yields suggest that markets are pricing in a growing economy under Trump but also anticipating a larger US debt load, elevated Treasury issuance, and inflationary pressures.

Even so, Treasury Inflation-Protected Securities (TIPS), once heralded as a hedge against inflation, appear to have fallen out of favor.

Despite metrics pointing to inflation risks, TIPS remain unpopular among investors, reflecting lingering skepticism from past losses during periods of rising interest rates

In a real-time gauge of TIPS demand, the Treasury plans to auction $17 billion in securities maturing in 10 years on Thursday.

This issuance will serve as a litmus test for whether investors are ready to reembrace TIPS in the face of renewed inflation risks.

TIPS: A shadow of their promise

Introduced in the 1990s, TIPS were designed to help investors navigate inflation.

However, their performance during the Federal Reserve’s historic rate hikes exposed vulnerabilities, particularly for longer-duration bonds.

The 2022 bond market rout left TIPS holders facing steep losses, souring investor sentiment.

The rapid ascent of real rates from negative territory crushed TIPS prices, leading to a mass exodus from the asset class.

Investors remain reluctant to revisit TIPS despite persistent inflation risks.

Rodney Sullivan, executive director of the Mayo Center for Asset Management at the University of Virginia, noted in a MarketWatch report that many investors haven’t returned to TIPS since the 2022 sell-off.

“Inflation doesn’t yet look defeated,” he said, but investor confidence in TIPS has been shaken.

Despite their initial appeal, TIPS faces structural challenges. Thin trading volumes make them susceptible to volatility, said Will Compernolle, macro strategist at FHN Financial in the report.

He noted that small shifts in market flows can cause outsized changes in TIPS yields, further complicating their appeal.

New TIPS issuances can also distort market readings. “The big drop on Aug. 3 was because it was the first business day after the new 10-year TIPS auction was settled, not because people radically changed their estimates of inflation over the next 10 years,” Compernolle explained.

These nuances, coupled with rising benchmark Treasury yields and mortgage rates nearing 7%, reflect broader inflation concerns, even as TIPS remain underutilized.

Are stocks the new hedge against inflation?

While TIPS have lost their luster, equities are emerging as an alternative hedge.

The S&P 500 has risen 24% year-to-date, with smaller gains in the Dow and the Russell 2000.

Nasdaq’s 26% climb underscores robust tech-sector performance, further bolstered by consumer spending resilience.

“Stocks have been working well recently as a hedge,” Kourkafas noted. “What is needed for inflation protection is having assets that can match the pace of inflation.”

This trend reflects a shift in investor strategies, with market participants favoring equities over bonds.

Even as the Federal Reserve signals caution, market enthusiasm remains strong, driven by expectations of growth-friendly policies under Trump’s leadership.

How real are the inflation fears?

Rising long-term bond yields suggest that markets are pricing in a growing economy under Trump but also anticipating a larger US debt load, elevated Treasury issuance, and inflationary pressures.

Tom Barkin, president of the Richmond Fed, told the Financial Times that the US was vulnerable to inflation shocks.

He said businesses were “concerned” about the inflationary effects of the sweeping tariffs and plans to deport illegal immigrants that Trump touted on the campaign trail.

“I can see why the businesses think that,” Barkin said, but he noted that other Trump policies related to boosting domestic energy production “might be disinflationary”.

The Federal Reserve has taken a cautious stance. October’s consumer-price index revealed an uptick in inflation to 2.6% annually, the first increase in seven months.

Fed Chair Jerome Powell reassured markets by indicating he would not resign if asked by Trump, adding stability to monetary policy discussions.

Powell expects inflation to remain around 2% to 3% next year, allowing for modest rate cuts.

“Inflation is a risk,” said Angelo Kourkafas, senior investment strategist at Edward Jones.

“But not to the extent as in the last three years.” Kourkafas pointed to corporate pricing power as a hedge, with businesses passing higher costs onto consumers, bolstering stocks as an inflation-resistant asset.

The post Inflation fears grip Wall Street, but TIPS struggle to attract investors – here’s why appeared first on Invezz

The Dow Jones Industrial Average surged 544 points (1.25%) on Thursday, while the S&P 500 gained 0.5%, buoyed by investor interest in cyclical stocks expected to thrive in a growing economy.

In contrast, the Nasdaq Composite dipped slightly as technology shares like Nvidia, which recently reported earnings, faced declines.

Banking giant Goldman Sachs, industrial leader Caterpillar, and retailer Home Depot emerged as key winners of the day.

The Russell 2000 Index, often seen as a gauge for small-cap companies and a potential beneficiary of economic growth, rose more than 1.8%.

Other technology, including Meta Platforms, Amazon, and Apple also dropped, further weighing on Nasdaq. 

Meanwhile, NVIDIA Corporation also fell on Thursday as investors were unimpressed that the company’s forecast was its slowest in seven quarters. 

The stock fell despite posting positive earnings figures. Shares were down 1.4% from the previous close. 

“Nvidia had a spectacular quarter … but it is overshadowed by expectations. Great expectations are built in the stock and have been running at the rate at which Nvidia has been running,” Art Hogan, chief market strategist at B Riley Wealth told Reuters. 

Some traders attributed the losses to slowing revenue growth from previous quarters or concerns that the chipmaker didn’t exceed the most optimistic guidance estimate, according to a CNBC report. 

Meanwhile, Bitcoin hit a new record high of $98,000 on Thursday as investors remained optimistic that President-elect Donald Trump’s administration would be beneficial for the crypto industry.

Alphabet stock falls

Shares of Alphabet fell as much as 6% on Thursday as antitrust concerns weighed on sentiments. 

Earlier this week, the US Justice Department had called for Google to divest its Chrome browser business.

This comes after a court in August ruled that Google has monopolized the search market with its Chrome browser. 

“To remedy these harms, the [Initial Proposed Final Judgment] requires Google to divest Chrome, which will permanently stop Google’s control of this critical search access point and allow rival search engines the ability to access the browser that for many users is a gateway to the internet,” the Justice Department said in its filing. 

At the time of writing, shares of Alphabet were down more than 6%. 

Snowflake share surges

Share of Snowflake popped 31% on Thursday and was on course for its best day ever. 

The optimism in the market was due to positive earnings results.

The data analytics software company beat Wall Street projections by posting 20 cents per share adjusted earnings on $942 million in revenue. 

LSEG had anticipated the company to post an adjusted earnings of 15 cents per share and $897 million in revenue. 

Snowflake said it expects product revenue for the 2025 fiscal year to reach $3.43 billion, up from a previous forecast calling for $3.36 billion. 

Weekly initial jobless claims fall below forecast

People filing for unemployment claims for the first time in the US came in at 213,000 for the week ended November 16. 

Claims had fallen from the preceding week’s figure of 219,000. The figure for the week ended November 16 also beat the expectations of Wall Street economists, who expected 220,000 new claims. 

The robust economic data showed that the labor market in the US remained resilient. 

Continuing claims for jobless insurance climbed to 1.908 million from 1.872 million last week and 25,000 more than the Street’s estimate of 1.883 million, according to a CNBC report. 

The resilient labor market in the US might make it more difficult for the US Federal Reserve to cut interest rates at its December policy meeting. 

The post Dow and S&P 500 rise; Nasdaq dips as Alphabet, NVIDIA fall and Snowflake jumps 30% appeared first on Invezz

Americans can look forward to more affordable Thanksgiving meals this year as grocery bills for the traditional feast have dropped for the second consecutive year.

According to the American Farm Bureau Federation, the average cost of a “classic” Thanksgiving meal for 10 people is $58.08 in 2024, a 5% decrease from 2023 and a 9% drop from 2022’s record high of $64.05.

This price includes staples like turkey, stuffing, sweet potatoes, peas, cranberries, and pumpkin pie essentials.

The broader decline in grocery costs aligns with a nationwide slowdown in food inflation.

During the pandemic, food prices surged faster than at any time since 1979, peaking in 2022.

However, inflationary pressures began to ease in 2023, and the trend has continued into 2024.

The USDA attributes this decline to reduced wholesale food prices and stabilizing energy costs, which have helped bring some relief to households.

Even so, nearly half of Americans hosting Thanksgiving this year remain concerned about the cost of the event, according to a Deloitte survey.

Households opting to add extras such as ham, russet potatoes, and green beans would see their bill rise to $77.34, still an 8% reduction from last year.

While the declines offer relief, costs remain elevated compared to pre-pandemic levels.

“Declines don’t really erase the dramatic increases we had,” said Bernt Nelson, an economist with the Farm Bureau, noting that the average meal is still 19% pricier than in 2019.

Turkey prices: A curious decline amid lower supply

The most significant price relief comes from turkey, a centerpiece of Thanksgiving meals.

Despite a drop in turkey production to its lowest level since 1985, the national average cost of a 16-pound bird fell by 6% to $25.67.

Overall, turkey prices are down about 4% year-over-year, according to the consumer price index.

“This year, turkey has been a curious item,” Bernt Nelson, a Farm Bureau economist, said in a CNBC report.

The US Department of Agriculture (USDA) reported that 205 million turkeys were raised in 2024, a 6% decline attributed to the ongoing impact of avian influenza, which has decimated poultry populations since 2022.

Ordinarily, reduced supply would drive prices higher, but waning consumer demand offset the potential spike.

However, per capita turkey consumption has dropped by about a pound this year, contributing to the overall price decline.

“Turkey price movements had the biggest impact on the overall cost of a Thanksgiving meal this year,” Nelson noted, given that the bird typically accounts for 44% of the total grocery bill.

Processed foods buck the trend

While turkey and milk prices fell, processed foods like dinner rolls and cubed stuffing have become more expensive.

These items saw price increases exceeding 8% in 2024, driven by rising labor costs and other non-food-related inflationary pressures throughout the food supply chain.

According to the Farm Bureau, these increases highlight the lingering effects of pandemic-era disruptions.

During the pandemic, food prices surged due to supply chain challenges, labor shortages, and external factors such as Russia’s invasion of Ukraine, which drove up energy costs.

“Higher energy prices have a ripple effect, increasing costs across the supply chain,” said Nelson.

Although inflationary pressures have eased since 2022, labor costs remain a challenge for food producers.

The post Lower turkey prices to reduce the cost of Thanksgiving meals this year appeared first on Invezz

Gold prices have quickly bounced back from their steep losses, and were on course to climb over $2,700 per ounce again. 

Prices have risen for four consecutive sessions as safe-haven inflows have increased, following a lacklustre revenue forecast by Wall Street giant NVIDIA Corporation and rising Russia-Ukraine tensions. 

Gold prices on COMEX have risen 4.7% so far since the close of last week.

Most of these gains have been on the back of intensifying Russia-Ukraine tensions. 

At the time of writing, the December gold contract on COMEX was $2,690.35 per ounce.

Prices had touched a two-week high of $2,694.40 per ounce earlier in the session. 

This year gold has climbed over 30% so far as the yellow metal has been buoyed by expectations of lower interest rates and rising geopolitical tensions.

However, the dollar’s surge after President-elect Donald Trump won the US 2024 elections, halted the rally in prices. 

Experts had also said that the correction in prices from $2,800 to about $2,550 was healthy.

The World Gold Council said last week that the correction in gold prices would not be a prolonged one. 

Carsten Fritsch, commodity analyst at Commerzbak AG, said.:

Since the arguments in favour of gold have not diminished, the lower price level is apparently leading to buying interest.

“This can be seen from inflows into the world’s largest gold ETF since Friday,” he added. 

“It’s really one main geopolitical factor that’s at play here in the gold market over the course of the last several days – the increased tensions between Ukraine and Russia is probably most notable,” David Meger, director of metals trading at High Ridge Futures, was quoted by Kitco.com. 

Geopolitical tensions 

Russia recently said that the bar for using nuclear weapons has been lowered after the US allowed Ukraine to use US-made weapons in the war against the Kremlin. 

This raised concerns over escalating tensions in the region and the involvement of the US. 

Over the last weekend, Russia had launched its biggest attacks in almost three months on Ukraine, crippling the nation’s power grid. 

This prompted Ukraine to retaliate with a series of strikes against Ukraine this week, using western weapons. 

The escalating tensions have increased safe-haven inflows into gold and silver, which has supported prices in the last one week. 

“This, in turn, supports prospects for a further near-term appreciating move for the commodity, which remains on track to register strong weekly gains and snap a three-week losing streak,” Haresh Menghani, editor at Fxstreet, said in a note. 

How far can prices climb?

Gold prices had touched a series of record highs in the past few months. 

When the Middle East conflict between Israel and Iran erupted in October, gold prices on COMEX hit the $2,700 level for the first time. 

Subsequently, in the next few days, prices breached the $2,800 level as well. 

“Bulls’ next upside (gold) price objective is to produce a close above solid resistance at $2,700.00,” Jim Wyckoff, a senior market analyst at Kitco Metals, said in a note.

According to analysts at Fxstreet, if gold can consolidate above the $2,700-per-ounce level, prices could rise higher from there. 

“Acceptance above the said barriers will reaffirm the positive bias and lift the XAU/USD towards the next relevant hurdle near the $2,736-2,737 region,” Menghani said in the note. 

Though Commerzbank AG remained slightly less optimistic about gold’s prospects.

The German bank expects prices to average $2,600 per ounce during the December quarter, and for the first half of 2025. 

The rise in prices could also be limited if the US Federal Reserve slows down its rate-cut cycle.

Traders expected the Fed to cut interest rates by 25 basis points in December.

But, bets have slipped from as high as 85% last week to 55.9% currently, according to the CME FedWatch tool.

Central bank buying to support gold

Global central banks had slowed their purchases of gold in the last quarter ending in September, according data from the WGC. 

Gold buying by global central banks fell 49% on year to 186.2 tons during the September quarter. 

However, purchases by global central banks were at 694 tons since the beginning of 2024.

This is below the 2023 record, but is in line with the levels seen in 2022. 

“Based on statements from some central banks, there are now clearer indications that the sharp increase in the gold price since March has indeed inhibited some buying, as well as encouraging some selling among banks that manage their gold reserves tactically,” WGC noted. 

However, buying is likely to pick in the coming months, as per some experts. 

ANZ Research said:

Geopolitics, de-dollarisation and the waning appeal of US assets will remain structural drivers for central bank purchases.

The post As geopolitical tensions underpin prices, how far can gold climb? appeared first on Invezz