Staikouras from Washington: The prospects of the Greek economy are favorable despite the adverse conditions

Its development dynamics and auspicious prospects Greek economydespite the adverse conditions created by the multi-level external crises, analyzes the Minister of Finance Mr. Christos Staikouras during the meetings he has from today until the day after tomorrow, Saturday in Washington, on the sidelines of the Annual Meeting of the International Monetary Fund and the World Bank, with high-ranking executives of investment and banking groups and rating agencies (Bank of America, Citi, Commerzbank, Credit Suisse International, Deutsche Bank, Goldman Sachs, Moody’s, Nomura, Société Générale).

Mr. Staikouras presents the forecasts included in the draft Budget 2023, focusing on the positive change in the composition of GDP, as exports exceeded 40% of GDP in 2021 – a rate more than double, compared to 2010 – and in the 7th month of this year already reached 75% of last year’s level, while foreign direct investments recorded in 2021 the best performance of the last 20 years and in the first half of 2022 they touched 80% of last year’s total.

At the same time, unemployment formed at the lowest levels since May 2010, the “Red loans fell to 10% of banks’ total loan portfolio in June 2022, deposits have increased by €46 billion since June 2019, and public finances continue to improve – with the primary deficit expected to narrow to 1.7 % of GDP this year and public debt, as a percentage of GDP, to decrease by 24 percentage points.

In addition, Greece has been upgraded 11 times in the last three years by the rating agencies and, last August, came out of the Enhanced Supervision regime.

The Minister of Finance underlines, however, that there are significant challenges, strong uncertainty and downside risks linked to energy prices and inflation, which call for continued reforms, as well as dynamic, decisive and coherent solutions, both at national and European level .

He also points out that, at the European level, the recent decision of Ecofin to integrate REPowerEU in the update of the national Recovery and Resilience plans is an important step, but, by itself, it is not enough to achieve a drastic change in the adverse conditions that prevail today in the European energy markets. Therefore, as he notes, a significant strengthening of the degree of policy coordination in the European Union is required.

As for the national levelMr. Staikouras emphasizes the government’s commitment to continuing the implementation of prudent, pro-development and reform policies in the economic field, which are based on six axes:

1st. Implementation of targeted, temporary support measures, especially for the most vulnerable citizens, taking into account that this policy does not compromise fiscal targets and public debt dynamics.

2nd. Credible fiscal policy, based mainly on economic growth, with higher permanent tax revenues, supported by pro-development reductions in taxes and social security contributions.

3rd. Implementing a smart publishing strategy.

4th. Stimulating liquidity in the real economy, through credit expansion, the development of the loan arm of the National Recovery and Resilience Plan and the implementation of the new framework for private debt.

5th. Maintaining strong reform momentum, including privatizations.

6th Acceleration of the implementation of the National Recovery and Resiliency Plan, in the implementation phase of which, to date, 372 projects and sub-projects have been included, with a total budget of 13.5 billion euros.

RES-EMP

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