ECONOMY

Staikouras: Recovery is gaining traction

staikouras-recovery-is-gaining-traction

Finance Minister Christos Staikouras has welcomed the results of the 12th assessment report in the framework of the European Commission’s enhanced surveillance report on the Greek economy, released on Wednesday. He said it was another acknowledgement of a collective and systematic effort in the economic field in an environment of continuing difficulties and challenges on a global basis.

In a statement, Staikouras said the report stressed that Greece’s economic recovery was gaining ground despite the continuing pandemic and forecast that this dynamic course will be preserved.

“The recovery of the Greek economy is gaining traction, despite the ongoing pandemic,” the report said. Following a strong first half of the year and the better-than-expected tourist season, the Commission’s fall forecast expects growth in 2021 to reach 7.1%, thus practically reaching the pre-pandemic level of economic activity. Real GDP is forecast to grow by 5.2% in 2022, it added. The draft budget that is set to be put up for approval by Parliament projects a 6.9% expansion in 2021, followed by growth of 4.5% next year.

According to the report: “While still very intense, the impact of the pandemic is expected to gradually diminish with the ongoing vaccination campaign. The accommodative fiscal and monetary policy, coupled with the expected strong boost from the implementation of Greece’s Recovery and Resilience Plan, is set to sustain the momentum going forward. The labor market remains resilient, thanks also to the government support schemes which have continued to protect jobs in vulnerable sectors.” 

The 2022 draft budgetary plan “confirmed that the existing emergency support measures are expected to be largely phased out by the end of 2021, with those that remain active in the following year being adapted to the evolving needs of the economy,” the report said.

It added: “This, along with the economic rebound, is set to support the reduction of the general government deficit going ahead. The authorities successfully completed a further set of specific commitments. The European institutions welcome the close and constructive engagement in all areas and encourage the authorities to keep up the momentum and remedy the delays in particular as concerns financial sector reforms, arrears clearance, healthcare and justice.”