IOBE: Greek Economy to Grow Only 1.5% This Year

The latest forecast from IOBE think tank estimates that Greece’s economy will only grow by up to 1.5% this year, lower than initially expected due to the country’s delayed bailout review.

Initial projections by IOBE were at 1.5 to 1.8 percent growth this year in its previous estimate in January as compared to the 2.7 percent forecast made by the government.

“The bailout review, once again a protracted process, has consequences that we have seen in the past – it exacerbates uncertainty,” the think tank said in a quarterly review.

“Households and businesses put off decisions until the new fiscal measures and reforms are finalized, which has a negative impact on economic activity.”

The negotiations have resumed in Athens this week focusing on energy and labor reforms, pension cuts and tax hikes. Greece hopes a deal can be reached by May 22, when eurozone finance ministers will discuss the issue. Concluding the review will also unlock funds which Athens needs in order to repay loans maturing in July.

IOBE expects Greece’s unemployment to continue its decline for the fourth consecutive year in 2017 to 22.2 percent, but at a slower pace than last year.