The government received on Thursday another warning about the risk that growth rates may fail to rise above the current low level, with investments remaining at half the amount of those in other European countries and the unemployment rate refusing to budge below 15 percent. Nikos Vettas, the general director of the Foundation for Economic and Industrial Research (IOBE), added that if that happens, the country may slip back into recession.
“Unless the Greek economy releases and mobilizes strong productive forces through the appropriate structural interventions, there will be a swift return to recession, which in turn will undermine the servicing of the national debt in the coming years,” Vettas said while presenting IOBE’s quarterly report on the Greek economy.
The institute forecasts a growth rate similar or somewhat lower than last year’s 1.9 percent, matching the recent estimate by the Bank of Greece. Vettas warned that if this rate does not rise considerably in the next five years, to reach up to 3 or 4 percent, a larger gap will open up between Greece and the rest of the eurozone.
Equally important, he added, is that the groundwork be laid for the increase of the medium- and long-term growth rates, as the projected rate lags that of the eurozone by one percentage point.