Any government support measures should be focused and of a temporary nature, the Parliamentary Budget Office said on Thursday.
In its latest quarterly report, the office said that these measures should be temporary, focused and funded by additional current revenue so that they do not burden the public debt.
At the same time, it advised against taking horizontal support measures and noted that in the current climate there is no room for general interventions – as happened during the pandemic – as they could worsen an already fragile fiscal condition in the country.
The report noted that the Greek economy grew by 7% in the first quarter of 2022, exceeding a 5.4% average growth rate in the eurozone, while the unemployment rate fell significantly to 12.5% in April from 17.2% in April last year and employment grew by 10.8%.
It also stressed that the payroll cost index eased 1.9% in the first quarter, compared with the same period in 2021, while the current account deficit was almost two-and-a-half times more than in the first quarter of 2021 (6.4 billion versus 2.6 billion euros, respectively).
The inflation rate is steadily rising, with the harmonized index rising to 10.5% in May and the national index rising to 11.3%. The general government primary balance showed an improvement by 5.4 billion euros, while the public debt/GDP ratio continued to fall, helped by a significant increase in nominal GDP and rising inflation.
The office expects a slowdown in the growth rate of the country’s GDP in the second quarter of 2022, depending on tourism revenue, progress in the Recovery Fund, the impact of higher energy costs and an increase in borrowing costs. [AMNA]