Bank of Greece Forecasts 1.9% Growth for 2019 and Lower Primary Surplus



Bank of Greece in Volos. Photo by AMNA

The Bank of Greece published its interim report on Monetary Policy on Monday, where it highlights some interesting projections for the future of Greece’s economy.

The central bank estimates that the country’s gross domestic product (GDP) will grow by 1.9 per cent this year, 2.1 per cent in 2020 and 2.2 per cent in 2021.

The forecast for 2019 is lower than the Government’s estimate which is  a growth rate higher than 2 per cent.

The Bank of Greece also believes that the primary surplus for 2019 will reach 2.9 per cent, lower than the country’s obligation to achieve a primary surplus of 3.5 per cent.

The central bank acknowledges that the Greek economy has achieved an unprecedented correction of its macro-economic imbalances from 2010 until today, but warns that the economy still faces great challenges.

The report furthermore highlights that while significant risks came from both  he domestic environment, related to a backtracking or abolition of reforms, and the external environment, such as a slowdown of global economic activity because of intensifying trade protectionism and geopolitical tensions.

The central bank also recommends the promotion of reforms to make Greece an attractive destination for domestic and foreign direct investments that will support the transition of the Greek economy to a new, extrovert model, with ”high and sustainable economic growth rates”.

The report notes that it is imperative that Greece raises its public investments, which were significantly reduced in the previous years, as they have multiplicative benefits for the economy.

It also suggests that there is a need to speed up privatizations, as they encourage additional private investments.

With information from AMNA