ING is downgrading its forecasts for the Greek economy in 2022, as it finds that the recovery of the entire Eurozone is falling into a “puddle”, due to the Omicron mutation and high energy costs. However, the investment house estimates that the recovery will reopen its pace, pan-European, from the second quarter onwards.
In this context, ING estimates that the Greek economy will show growth of 3.4% this year and 2.9% in 2023, compared to 7.5% in 2022. It is noted that the previous estimates of the house spoke of a rate of 4% for 2022 and 2.7% for 2023.
According to ING forecasts, the Greek economy will show growth rates of 2.3% in the first quarter of the year (compared to 1.3% in the fourth quarter of 2021) and 1.7% in the second quarter of 2022.
Analysts estimate that inflation in Greece will be 3.3% this year and 1.7% in 2023, compared to 0.6% in 2021.
The blow of Omicron
ING expects sluggish growth for the entire Eurozone in the first quarter, as record cases in January due to the Omicron mutation caused absenteeism and a blow to production. At the same time, restrictive measures are affecting consumption, especially in the services sector. “The good news is that as we’ve probably reached the pinnacle of cases, restrictive measures in many countries are now easing,” said ING analysts.
On the other hand, however, the house estimates that it is too early to say that the problems in the supply chains have been addressed. And at the same time, high energy prices are another burden on economies, which will continue to negatively affect consumption for a long time. Overall, ING estimates that 2022 will close with growth rates of 3.7% for the Eurozone, with 2023 bringing a slowdown to 2.7% and 2024 falling to 1.5%.
With inflation expected at 3.3% this year, pressures on the ECB are intensifying, with ING predicting the end of the quantitative easing in September and possibly an increase in interest rates before the end of the year. “This is not yet certain, but it seems quite possible that by the summer of 2023, the deposit rate will have left the negative ground for good,” analysts say.
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