The Greek Foundation of Economic and Industrial Research (IOBE) presented its report on the Greek economy for the first quarter of 2014 on Wednesday, April 16.
According to the report, the Greek economy will stabilize, and may even grow slightly, after several years of recession. This is an improved forecast compared to the IOBE’s previous report in January, which estimated that Greek output would decrease further in 2014. The latest report also suggests that unemployment will fall to 26% in 2014.
Moreover, the report highlighted that the Greek return to bond markets in early April, after four years of absence, would enable banks to similarly raise funds and boost the money flow in Greece.
More specifically, according to the Greek government and Greece’s international lenders, the Greek economy is estimated to recover from its long-term recession and grow by 0.6% this year. The Bank of Greece, the national central bank, also estimates a 0.5% growth in 2014.
“With the Greek economy at a turning point, one of the factors that will determine whether GDP (gross domestic product) expands is tourism activity, which has a high weighting in national output”, the IOBE report stated, projecting that last year’s 15.5% increase in tourists will continue in 2014.
Furthermore, due to the long-term recession, along with wage cuts and a considerable spare capacity in the economy, consumer prices are expected to further decrease by about 0.6%, after a 1.3% decrease since March 2013, further increasing Greece’s economic competitiveness.
“The interest of foreign investors in Greece is indicative of the growing confidence in the viability of the Greek banking system,” the report concluded.