IOBE: Growth in 2017 not over 2 pct

TAGS: Finance

Economic growth will be smaller than the government expects next year, ranging between 1.5 and 2 percent, the Foundation for Economic and Industrial Research (IOBE) forecast on Tuesday.

The foundation’s quarterly report, presented by its general director Nikos Vettas, disputed the government’s forecast for growth of 2.7 percent in 2017, and revised its assessment for this year from a recession of 1 percent to just 0.5 percent, mainly thanks to the recovery of private consumption from the reduction of unemployment in the second half of the year and the strengthening of investment.

The economy will start expanding next year, IOBE argued, because of the continued drop in unemployment, which will assist consumption, the increase in investment and the expected settlement of nonperforming loans. The report anticipates the jobless rate to drop to 22.5 percent in 2017, from about 24 percent this year.

“The question is how we will deal with the economy’s structural problems,” Vettas said. He also accused the country’s creditors of “excessive persistence on fiscal results – while attributing relatively little importance to the efficient operation of the markets and the public administration – which does not favor the economy in the long term.”