Stagnant inflationary trends causes the “perfect storm” we live in after Russian invasion of Ukraine which followed the outbreak of the pandemic, according to Giannis Stournaras.
Speaking at a banking conference, he argued that war in Ukraine has strengthened all the vulnerabilities of the system and has complicated the situation. “Inevitably, the prospects for the economy and the financial sector are affected by uncertainties and policy makers and actors of the market “They may have to navigate stormy and uncharted waters in the coming months,” he said.
Mr. Stournaras stated that regarding greek economy there are strong windsi as in 2021 the real GDP grew by 8.3% . At the same time, labor market developments are favorable with employment growth accelerating and unemployment declining. Greece is entitled to receive more than 70 billion euros in EU funds over the next seven years. About half of these funds (€ 30.9 billion) are related to the EU Recovery Plan (NGEU). The rest is structural funds from the EU budget 2021-2027.
However, he warned that “the road ahead is not paved with rose petals as the signs of the pandemic are still visible, while new and unpredictable challenges are more than just looming. The consequences of the Russian invasion of Ukraine are a significant negative supply-side shock, which is expected to negatively affect production and further increase energy prices. In addition, a possible further escalation of the crisis carries significant adverse risks to the outlook for the economy.
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