On the inflation front, it is expected to reach 4.4% this year in Greece, 1.9% in 2024 and 1.7% in 2025
A very weak recovery, with growth well below the historical average but no significant recessionary forces is how Bank of America describes the outlook for the European economy, as it downgrades its 2023 growth forecast to just 0.4% . The American investment house, however, which recently characterized the image of the Greek economy as encouraging, maintains unchanged its estimates for growth of 1.7% this year in Hellas.
According to BofA, the Eurozone will show growth rates of 0.8% in 2024, with the Greek economy growing at 1.2%. For 2025, rates of 1.9% are expected in Greece, compared to 1.5% in the Eurozone.
On the inflation front, it is expected to reach 4.4% this year in Greece, 1.9% in 2024 and 1.7% in 2025.
As Bank of America analysts note, six months ago they were predicting a mild technical recession in the Eurozone and a very shallow recovery thereafter. Their forecast for a recession was confirmed after the data revisions, but it was still milder than they had expected, they explain.
Their assessment that inflation will remain high throughout 2023 and much of 2024 is maintained. The consumer price index is expected at 5.3% this year, at 2.4% in 2024 and at 1.5% in 2025, with the house stressing that the structural inflation turns out to be more persistent than he expected.
In this context, BofA has raised its estimates for the ECB’s final interest rate from 3.25% to 3.75%, but speaking of a significant risk of another move in September, which would bring rates to 4% .
As for the first interest rate cuts, the house believes that the ECB it will wait until June 2024. With weak growth but no recessionary tendencies, the ECB will not cut interest rates before inflation returns to its 2% target, he estimates.
It is recalled that in its latest analysis of Greece, BofA identified three positive elements for the economy, talking about the strong tourist season, the revival of investments with the help of reforms and EU funds and political stability, as the next government is expected to stick to market-friendly policies.
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