ECONOMY

BoG insists on 4.2% growth

bog-insists-on-4-2-growth

The Bank of Greece is standing by its forecast for an economic rebound of 4.2% this year, as Governor Yannis Stournaras is expected to announce on Tuesday, according to sources, at the presentation of his report at the central bank’s general meeting. For 2022, the BoG anticipates a 4.8% acceleration.

The central bank’s projection is among the most optimistic expressed to date. It relies on the better-than-expected results of the last quarter of 2020, along with the progress of the vaccination process.

According to the BoG, the recovery will start from this quarter. However, Stournaras will also point out that the uncertainties remain considerable; he will refer to risks such as the new virus strains, the delays in the vaccine rollout, and the difficulty in carrying out checks, which have allowed the pandemic to continue for longer than it would have otherwise.

Both the government and the European Commission anticipate an economic recovery of 3.5% for this year. Parliament’s State Budget Office is more pessimistic, putting the rebound at just 2.7%, while there is also a more optimistic view, by National Bank, for a 4.7% recovery.

Sources say that Stournaras will also express his concern about the state of the economy after the pandemic, when the support measures will have stopped. That is when it will emerge by how much bad loans will have increased, which sectors and enterprises will be able to stand on their own feet, and what the budget’s fundamentals will look like.

According to the central bank governor’s analysis, the pandemic will leave in its wake major problems for the global economy, leading to conditions of poverty and social inequality. However, he will note, it has also rendered clear how interdependent states are and how important a common effort to face common problems is.

The report will further give Stournaras the opportunity to reiterate his positions in favor of the joint fiscal support of the European economies, with the strengthening of the flow of resources to that end, just as he had recently argued in an interview with German daily Handelsblatt.