Two strong new votes of confidence in the prospects of the national economy have come by way of HSBC and UniCredit, extending the list of international firms that have recently raised their forecasts for the country, estimating that 2021 will be a very important year for the Greek growth narrative.
Both investment banks more than doubled their estimates for the expansion of the Greek economy this year from their previous projections, putting it between 4.5% and 5.5%.
The main reasons for the projection upgrades are the beginning of the Next Generation EU fund’s cash flow and the significant messages from the “Greece 2.0” plan, the economy’s better-than-expected performance in the first quarter of the year, the reduction in coronavirus cases and the increase in vaccination rates.
Nevertheless they do estimate that the burden of the deficits the pandemic has created will continue in the next couple of years too, while the national debt will remain above 200% of gross domestic product, which heightens the challenges for 2023.
HSBC is now placing its bets for Greek growth in 2021 at 4.5%, from a previous estimate for 2.2%. This is attributed to the improved growth prospects over the last three months as the pandemic has been contained and inoculations accelerated. It also noted that business and consumer sentiment has improved, while the application of the NGEU blueprint will provide a significant boost to GDP through investments. Still, it curtails its projection for next year’s growth to 5.5%, from 6% previously.
UniCredit is even more bullish on Greece, expecting growth to come to 5.5%, against a previous forecast for 2.5%, dropping to 3% in 2022 from 5% previously. It explains that this revision mainly reflects the stronger-than-anticipated start to this year, with GDP advancing 4.4% on a quarterly basis, which is the highest rate recorded since 2000, despite the extended lockdown. It adds that the economic indexes have strengthened significantly and should rise further on demand and tourism.