Greece has weathered the pandemic well, with a considerably stronger-than-expected recovery, but high energy prices are expected to further increase inflation, the International Monetary Fund (IMF) said in a report on the country on Wednesday.
Reforms progressed in several areas, including digitalisation, privatization, improving the fiscal policy mix, and bank balance sheet repair, it added.
Greece finalized its early repayment to the IMF on April 4 and is expected to graduate from the quarterly European Institutions’ Enhanced Surveillance framework on schedule by August 2022. Despite the adverse impact of the war in Ukraine, growth is projected to remain robust at 3.5% this year and 2.6% in 2023, the IMF said in a report on June 21.
“However, high energy prices are expected to push up average inflation to 6.1%,” it added. Public debt is on a downward trajectory and rollover risks appear manageable.
Executive Directors welcomed the stronger-than-expected economic recovery in 2021, which was buttressed by the Greek authorities’ strong policy response to the Covid-19 crisis, past structural reforms, and the support from the European Union.