Greek economy set to grow 5.0% in 2022, central bank says

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ATHENS, Dec.22 (Reuters) – Greece’s economy is expected to grow 5.0% next year after expected growth of 7.2% this year, the country’s central bank said in an interim policy report on Wednesday monetary.

“In 2022, the growth rate of the economy is expected to reach 5.0% and 3.9% in 2023, provided that the economy continues to be significantly stimulated by tourism, the recovery of the euro area and the ‘acceleration of investments,’ the Bank of Greece (BOGr.AT) said in the report.

The Bank of Greece said the recent deterioration in epidemiological data, combined with the low vaccination coverage of the population compared to the European average, increases uncertainty and risks to economic growth.

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Nevertheless, the medium and long term prospects for the Greek economy remain “very positive”, supported by the launch of investment projects and reforms associated with the National Recovery and Resilience Plan.

“Consumer spending is expected to continue to rise over the next two years, albeit at a more moderate pace, in line with rising employment,” the report said.

The strong inflationary pressures this year largely reflect the base effects of negative inflation in 2020 and the sharp increases in the prices of energy, food and imported intermediates, he said.

But Greece’s inflation rate remains one of the lowest in the eurozone and for 2021 as a whole it is unlikely to exceed 0.6%.

Greece is expected to receive around 40 billion euros from the EU’s 2021-2027 multiannual budget and 32 billion from the European NextGenerationEU stimulus fund, while also attracting foreign direct investment, the Bank of Greece said.

Regarding the banking system, the central bank said the stock of non-performing loans (NPLs) fell to € 20.9 billion at the end of September, down € 26.3 billion from the end of December. 2020 and a decrease of 86.3 billion euros compared to March. peak of 2016.

The ratio of banks’ non-performing loans to their total loans has declined significantly, but at 15% in September, it remains high compared to the EU average of 2.3%.

“The extent of the fallout from the pandemic, which cannot yet be quantified, should manifest itself with a certain delay, after the complete lifting of support measures. Banks must reassess the adequacy of their provisions for credit risk” , did he declare.

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Reporting by George Georgiopoulos and Lefteris Papadimas; Editing by Kirsten Donovan

Our standards: Thomson Reuters Trust Principles.

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