Stournaras: 6% growth in 2022

The Bank of Greece forecasts an increase in GDP by 6% for this year, while the growth rate is expected to decline in 2023 to 2.8%, as the governor of the Bank of Greece, Mr. Giannis Stournaras, said a while ago while speaking at the Economist conference.

As Mr. Stournaras explained, the better performance of the Greek economy compared to that of the European Union, is mainly due to the increased receipts from tourism as well as the inflows from the RRF as well as the phenomenon of “suppressed demand”.

However, as he warned, the developments do not allow for complacency, even though the developments on the GDP front significantly improve the image of the Public Debt, as its percentage decreases. But the combination of rising interest rates and rising energy prices will likely drive the eurozone economy in 2023 closer to the adverse scenario than the so-called base scenario. In any case, however, the Greek economy is estimated to remain in a better position thanks to the increased inflows from the RRF, but also to the lower energy dependence.

Nevertheless, in these conditions, as Mr. Stournaras said, the goal of obtaining investment grade becomes even more imperative.

The combination of the increase in interest rates and the deterioration of the quality of assets (loans) causes particular risks to the balance sheets of banks. He acknowledged, however, that banks are benefiting from rising interest rates.

The ECB governor argued that the ECB should continue to normalize monetary policy gradually and flexibly, until interest rates return to the so-called neutral level or even higher.

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