BUSINESS

Stournaras: Greece can achieve growth over 3 percent after 2020

TAGS: Economy

Greece could achieve growth rates in excess of 3 percent under certain preconditions, Bank of Greece Governor Yannis Stournaras has said, predicting however that the rate this year will stand at 1.9 percent and will exceed 2 percent in 2020.

Speaking at an event organized by the Stavros Niarchos Foundation at Yale University, Stournaras called on the Greek government to quickly implement its program of economic reforms in order to avert future risks and address the challenges and side effects of the country's debt crisis such as a reduction in investments totaling 67.5 billion euros in the period between 2010 and 2016.

In any case, as Stournaras stressed, the continued enforcement of reforms is one of Greece's commitments under its enhanced surveillance as well as a precondition for further debt lightening measures. 

Implementing reforms and speeding up privatizations will boost market trust in the growth prospects of the Greek economy, he said.

He also underlined the need for the primary budget surplus to be curbed, noting that the systematic overshooting of primary surplus targets over the past few years was achieved through cuts to public investments and high taxes which hampered the economy's prospects for growth while also reducing the competitiveness of Greek companies. 

Reducing the proportion of non-performing loans held by Greek banks would improve borrowing terms for businesses and households while also boosting market trust and fueling investments, he said, adding that this would in turn facilitate a return to investment-grade bonds and allow Greek paper to be included in the European Central Bank's quantitative easing scheme. 

Such a development, he said, would further reduce the cost of borrowing for Greece, thus boosting growth and improving debt sustainability.

 

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