Greek central bank chief says economy can recover in 2016


Greece's economy will continue to contract in the first half of this year but has the potential to rebound afterwards if there is a speedy conclusion of the country's first bailout review, Bank of Greece chief Yannis Stournaras said on Monday.

Stournaras has urged the leftist-led government to implement reforms agreed with the country's lenders, warning that backtracking would entail risks the economy could not withstand.

“It is estimated that, at least for the first half of 2016, GDP will remain in negative territory because of the carry over negative impact of 2015,” Stournaras said in a speech to the Hellenic American Chamber of Commerce.

“In the second half of 2015 and due to the impact of capital controls and the tax burden on households and businesses, it is estimated that economic activity declined, leading to a small 0.2 percent recession for 2015 as a whole,” he said.

Stournaras reiterated that a successful review would help restore confidence, improve the banking system's liquidity and further loosen capital controls, paving the way for an economic recovery in the second half of this year.