The governor of the Bank of Greece, Giannis Stournaras, expressed his assessment that the Greek economy will be upgraded by the rating agencies to investment grade after the elections.

Speaking at the conference organized by the Hellenic-British Chamber in collaboration with the Economist, he appeared optimistic both about the de-escalation of the public debt and about the development path of the economy. As he characteristically said, if the Greek economy is at risk from something, it is not the recession but its overheating. He reiterated that this year’s GDP will grow by around 2.3% this year, significantly outstripping the growth performance of the Eurozone as a whole. Regarding the public debt, he argued that in the coming years – without even taking into account the positive effect of the primary budget surpluses – the ratio of public debt to GDP will decrease by approximately 4% per year.

On the issue of interest rates and how long they will remain high, he said that “when these negative effects fade, and provided that inflationary expectations remain stable, interest rates will be able to gradually deescalate, to the extent that this is in harmony by achieving our goal. When we achieve our inflation target, markets expect interest rates to hover close to 2%.”

However, he estimated that “we are close to the end of the upward cycle of interest rates, although we have not yet reached the end. Unless something changes dramatically, possibly in 2023 we will see the end of the increases.” He also mentioned that we may even have a “pause” in the increases in July.

“Inflation is already falling and will fall further when the effects of the measures we have already taken play out fully. However, inflation will remain at a higher level than the price stability target for a long time and this is something that does not let us rest,” he noted.

Speaking on the same panel, Jim O’Neill, former president of Goldman Sachs Asset-Management (GSAM), argued that the messages from the global economy regarding the possibility of a new recession are contradictory. He said that the steps Greece has taken compared to what was happening five years ago when he visited our country again are spectacular. As he characteristically said at the time, none of the delegates believed that Greece would be able to recover developmentally. He added that the “country did not let the crisis go to waste”.

For her part, Eleni Vrettou, managing director of Attica Bank, who also participated in the same panel, argued that Greece has not seen phenomena similar to those that led to the crisis of large banks such as Cretit Suisse. He estimated that the banks have returned to normality as they managed to show profits after many years.