Citigroup makes gloomy forecasts for Greece

Citigroup economists predict that Greece will be in recession until 2015 and should not expect a return to growth before 2013, they said in a report published on Tuesday.

In «Prospects for Economies and Financial Markets in 2012 and Beyond,» the international financial services group also predicts that Greece’s economy will shrink by an additional 5.6 percent of gross domestic product this year, 4.9 percent in 2012 and 3.1 percent in 2013, before which the country will be unable to return to growth.

The report warned that the new rescue package being drawn up for Greece by the European Commission, the European Central Bank and the International Monetary Fund, in combination with a sizable haircut to Greek debt, are measures that will prove insufficient to guarantee the sustainability of the country’s public debt.

Its forecasts for unemployment are not optimistic either, as the report suggests that the percentage of the country’s jobless would shoot up to 20.1 percent in 2012 and 20.9 percent in 2013, from the current 16.6 percent.