The growth rate of the Greek economy in the second half of 2016 will probably be positive, resulting in zero at the end of the year, according to a European Bank for Reconstruction and Development report.
The report, called Regional Economic Prospects in EBRD Countries of Operations, says that in 2017 the Greek gross domestic product growth rate will reach 2%.
“The Greek economy contracted 0.7% year on year in the first half of 2016, partly due to base results from the increase in consumer spending in the first half of 2015,” EBRD says, adding, “An encouraging sign this year is the positive contribution of fixed capital investment to growth, while other components of the national accounts like private consumption, public consumption and net exports, moved downward again.”
Early indications are that 2016 will be another record year for tourism, with international arrivals at the main airports in the first nine months of the year showing a rise of 7.6% annually. The business confidence also increased gradually, helped by the government’s progress in completion of the prerequisites of the economic adjustment program for the European Stability Mechanism (ESM), the EBRD report says.
“As a result, economic growth is likely to be positive in the second half of 2016, giving zero growth for the full year,” the report says.
“For 2017, the outlook is more favorable, but the continuing capital controls (although they have eased some in recent months), further fiscal consolidation measures and the weaknesses in the financial sector, where non-performing loans remain important, will likely contain the growth rate to 2%,” the report further says.