Bank of Greece interim report urges political forces to work together in time of high uncertainty
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Greece will have growth rates of 6.2 pct in 2022 and 1.5 pct in 2023 (as opposed to 1.8 pct, as envisaged in the budget), the Bank of Greece forecast in the Interim Report on Monetary Policy submitted to the president of parliament on Wednesday.
It also appealed for cooperation on a political level within the country, pointing out that 2023 is year of general elections and required “mutual collaboration and understanding of the political forces in order to carry out key economic policy commitments and protect all that the Greek economy has achieved in the last decade.”
he central bank saw growth rates recovering in the following years, reaching 3.0 pct in 2024 and 2.8 pct in 2025, provided that the geopolitical crisis recedes, energy prices fall, that Greece continues to get significant support from tourism, that investment plans are implemented and there is a stable growth prospect in the eurozone.
The report also highlighted the risks and uncertainties linked to external factors, noting that growth could slow even faster if the war in Ukraine escalated, leading to a greater slowdown of the world economy, or if inflation was higher and more persistent. Other risk factors included a new wave of the pandemic or low absorption of EU funds, as well as the appearance of a new ‘generation’ of non-performing loans, increased geopolitical tension in the Southeast Mediterranean or if the formation of a new government after the general elections was delayed.
With respect to the challenges facing the Greek economy, the central bank noted that structural competitiveness remained relatively low on a European and global level, in spite of the improvement in public finances, a lower taxation and social insurance burden and greater openness.
It also noted that Greece ranks 58th among 180 countries in the 2021 corruption perception index issued by Transparency International.
The report warned that an increase in the minimum wage next year must be in line with what the economy can withstand to avoid further inflationary pressures, and that the uncertainty generated by the various crises did not allow complacency with regard to the banking system, meaning that action must be taken to further reduce non-performing loans and improve profitability.
Source: ANA-MPA
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