European Commissioner for Financial Affairs Pierre Moscovici released an economic forecast for Greece showing -0.7 percent recession for 2016, but 2.17 percent growth in 2017, while GDP remains stable (0 percent) in 2015.
The forecast also shows a gradual drop in unemployment: 25.1 percent in 2015, 24 percent in 2016 and 22.8 percent in 2017. Regarding the deficit, it stands at -7.6 percent in 2015 (it was -3.6 percent in 2014), but will decrease to -3.4 percent in 2016 and -2.1 percent in 2017.
The EC sees that the Greek debt to GDP ratio will reach its highest in 2016 at 185 percent but it will drop to 181.8 percent in 2017. The report says that the Greek economy showed considerable resistance to the capital controls and the recession impact was not as strong as expected. Consumption remained stable, bank recapitalization was successful, there was progress in privatizations and all these factors build confidence in the economy.
The Commission report shows that Greek tourism brought considerable revenue, while at the same time imports decreased and exports increased. An easing on capital controls is expected in the second half of 2016, an increase in privatizations and a general upgrade of the economy is expected. The lower cost of fuel oil and energy in general will also help in the upward turn.
The report further says that if capital controls are lifted and the required reforms are implemented timely and effectively, the figures will be even more positive.
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