BUSINESS

BoG issues future growth blueprint

EIRINI CHRYSOLORA

TAGS: Finance

Investor confidence in Greece will only strengthen with the promotion of reforms, the safeguarding of fiscal stability and the adoption of a more growth-friendly economic policy mix, Bank of Greece Governor Yannis Stournaras argues in his monetary policy report published on Monday as a blueprint for the next government.

The central bank’s report reiterates its estimates for a primary budget surplus of 2.9 percent of gross domestic product, missing the 3.5 percent target due to Prime Minister Alexis Tsipras’ May handouts and posting a shortfall of some 1.1 billion euros.

Still, Stournaras stresses his position that the primary surplus targets ought to be reduced for the sake of growth, adding that this must take place “in cooperation with the [country’s] European peers.” He also calls for a policy mix “with lower tax rates and social security contributions that would be friendlier toward investments, competitiveness and growth.”

The focus of the report is economic expansion, with the central bank projecting it will amount to just 1.9 percent this year, down from a government estimate of 2.3 percent, before rising to 2.1 percent in 2020 and 2.2 percent in 2021.

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