Stark warning by Stournaras

Central banker sends a message to political parties to preserve the economy’s credibility

Stark warning by Stournaras

Bank of Greece Governor Yannis Stournaras on Friday set the safeguarding of the credibility of economic policy as the main goal ahead of the elections, and in this context called on the political forces to show “prudence and responsibility” and support “the national economic goals, in order to maintain the climate of confidence in the prospects of the Greek economy.”

In a clear message for the next government, from a BoG general meeting where he presented his report, Stournaras emphasized that “the continuation of reliable economic policies, particularly in the area of fiscal policy, the preservation of the significant achievements of past reform efforts and the establishment of a new reform program for the government that will emerge after the national elections, focusing on the modernization of the public sector and the upgrading of institutions and infrastructure, must be the beacon that will guide us in the turbulent waters of the new economic reality.”

The central banker explained that the good performance and remarkable resilience shown by the Greek economy in recent years, amid international crises, is largely the result of support from European institutions. This in turn was the result of the implementation of credible fiscal and reform plans which must therefore be continued.

“It is a fact,” he said, “that a possible prolonged political uncertainty could undermine the climate of confidence that has been cultivated in recent years. However, the most significant risk to the economy is a return to ineffective policies of the past and the disruption and/or reversal of reform efforts. The memories of the painful adjustment achieved in previous years are still fresh to remind us of the high economic and social costs required to correct the chronic imbalances of the economy.”

The BoG revised its forecasts for the economy, as the government has already done. The central bank now forecasts a growth rate of 2.2% for 2023, against a forecast of 1.5% in December, and against the government’s 2.3%.

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