The governor of the Bank of Greece expressed his optimism for the course of the Greek economy to Politico – Less influence from international conditions “sees” for 2023 – Inflation on the decline
The governor of the Bank of Greece appeared optimistic about the course of the Greek economy despite the looming recession in the eurozone Giannis Stournaras.
In an interview with Politico, the head of the Central Bank predicts that this year the growth rate of the Greek economy will close to 6%, while for 2023 he argued that the country will be less affected by the trade-off between growth and inflation, as the economic outlook remains positive.
“The Bank of Greece thought we would have 3.2% growth this year, but now we revise it to 6%, due to much higher receipts from tourism,” he said, adding that it appears that consumers aggressively spent all the savings they had accumulated during the pandemic. He also estimated that if we take into account the GDP growth rates for 2021 and 2022, it is not unlikely that we will have an average growth rate of 3% during the time horizon of the Recovery and Resilience Facility (2022-2026).
For the whole eurozone he estimated that next year inflation will be below the 5.5% estimated in our baseline scenario, while he predicted that there is a growing risk that the eurozone economy will be pushed into recession. He even cited a series of factors, such as the slowdown in the growth rate in the third quarter to 0.2% and the rapid deterioration of the business climate indicators recorded in the relevant surveys.
Referring to the policy measures taken by the ECB to curb the rise in inflation, he argued that, in addition to monetary and fiscal policy, it is necessary to move in a restrictive direction. If we want to reduce inflation under the current conditions without suffering a serious blow to financial stability and without raising interest rates excessively, monetary and fiscal policy cannot move in opposite directions,” said Mr. Stournaras. “If fiscal policy is too loose, then, unfortunately, that means that interest rates will skyrocket, which we don’t want to happen under any circumstances.”
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