BoE: Growth of 6.2% this year and 1.5% in 2023

Growth of 6.2% for this year and 1.5% (vs. 1.8% foreseen in the Budget) for 2023 predicts the Bank of Greece in the Interim Monetary Policy Report submitted today to the President of the Parliament.

However, the BoE predicts that the growth rate of the Greek economy is expected to recover in the coming years, reaching 3.0% in 2024 and 2.8% in 2025. These performances can be achieved provided that, on the one hand, the geopolitical crisis will have de-escalated and energy prices will have decreased and on the other hand that the Greek economy will continue to be significantly strengthened by international tourism, the good course of implementation of investment plans and the stable development perspective of the eurozone.

In addition, as it is typically stated, “given that 2023 is the year of national elections, the political forces must cooperate and agree in order to implement the basic commitments of the economic policy and to preserve what the Greek economy has achieved in the last decade. .”

Of course, as pointed out, forecasts for the future course of the economy are subject to uncertainties and risks which are mainly linked to external factors.

In particular, the rate of growth of the Greek economy may slow down more than expected in case of (a) further escalation of the war in Ukraine, as this will lead to a sharper slowdown of the global economy, (b) higher and more prolonged inflation, which which would lead to higher increases in nominal wages and thus set in motion a feed-back rise in inflation, (c) new wave of the pandemic, (d) low rate of absorption of EU funds, (e) emergence of a new generation of non-performing loans due to of the pandemic and the energy crisis after the end of state support measures and (f) delay in the formation of a government after the national elections and the implementation of economic policy commitments. The escalating geopolitical tensions in the southeastern Mediterranean region also pose a risk to the Greek economy.

Regarding the challenges facing the Greek economy the CoE underlines that despite progress in improving public finances, the reduction of the tax burden and insurance contributions, as well as the increase of extroversion, structural competitiveness remains comparatively low at European and international level. Additionally, Greece ranks 58th out of 180 countries in terms of the Corruption Perceptions Index, according to Transparency International’s 2021 survey.

It is also emphasized that the projected increase in the minimum wage planned for next year should be such that it corresponds to the real potential of the economy, in order to prevent a phase of secondary inflationary pressures, fueled by the rise in wages.

With reference to the developments in the banking system, it is pointed out that the uncertainty regarding the effects of the rise in interest rates, the prospects for lower growth of the Greek economy and the intensifying geopolitical and energy crisis, leave no room for complacency. Therefore, the challenges associated with the banking system and related to the further reduction of non-performing loans and the improvement of organic profitability should be addressed. However, it recognizes the progress made in reducing non-performing loans (to 9.7%) and that all major banks have already achieved their operational target of a single-digit NPL ratio.

RES-EMP

Read the News today and get the latest news.
Follow Skai.gr on Google News and be the first to know all the news.