The Greek economy will grow by 8-8.5% this year, followed by a more moderate pace of 4% in 2022, the Foundation for Economic and Industrial Research (IOBE) estimates in its quarterly report presented on Wednesday. However, for next year it also includes an alternative scenario for an expansion of just 2-2.5% if the pandemic hits Greece with another wave.
IOBE also sees possible risks in increasing energy prices and market unrest that will expand financing costs in more vulnerable economies such as Greece.
The foundation’s analysis further shows concern over the medium term, unless the current growth model changes, as it mainly relies on consumption.
“Higher growth rates in this decade, in excess of 3% on average, could only be achieved through an increase in productivity and the further attraction of productive elements, which requires substantial reforms in markets and the public sector,” claims IOBE Director General Nikos Vettas.
He also sounded the alarm about the re-emergence of deficits in the budget and in current accounts: “The focus of attention should be no other than the course of the twin deficits,” he underscored, asking for primary budget surpluses as of 2023.