Economic growth has rebounded in the second half of 2016 and it is projected to gain strength in 2017 and 2018 as structural reforms start to bear fruit; the conclusion of a policy review with creditors raises business and consumer confidence and the economic and political environment stabilizes, the Organization for Economic Cooperation and Development (OECD) said on Monday.
In its Economic Outlook report, the OED said that exports of services are underperforming because of structural issues and capital controls, which particularly affect the export revenue from the shipping industry and that employment is projected to increase but unemployment remains far too high.
The OECD said that a Guaranteed Minimum Income program should help address rising poverty and make growth more inclusive and that the implementation of key structural reforms to reduce the regulatory burden and ease regulation in the energy and transport sectors will boost productivity and growth. It was also noted that the high level of non-performing loans (NPLs) undermines credit growth, holding back investment.
It was also stated in the report that in order to deal with this issue, the authorities should implement already legislated incentives and performance targets for banks to monitor their progress in reducing bad debt.
The OECD said that a huge public debt undercuts confidence in the Greek economy, a situation that calls for additional debt relief. Also, the OECD believes that even if the ambitious medium-term fiscal targets established in the 2015 agreement with creditors were met, more should be done to make public debt clearly sustainable.
According to the report, employment is expected to rise, but the unemployment rate will remain at very high levels, particularly among young people.
Source: ANA-MPA
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