Bank of Greece chief sees recession bottoming out soon

Bank of Greece chief sees recession bottoming out soon

Greece’s central bank maintains a forecast of a mild 0.3 percent contraction in output this year as the government has proposed a further easing of capital controls in the country, Bank of Greece Governor Yannis Stournaras said on Monday.

Stournaras told Parliament there were growing indications a recession in the country was bottoming out, but said there should be no complacency in pursuing reforms outlined in a multi-billion-euro bailout deal with international creditors.

“Any delay in adopting reforms and privatizations which are outlined in the program could stunt an expansion in output, resulting in fresh uncertainty, a climate of trust undermined and weaker prospects of finally exiting this crisis,” said Stournaras.

The policymaker, who also sits on the governing council of the European Central Bank, said he expected the country to show signs of returning to growth in the second half of 2016.

For the whole year, he maintained his forecast of a 0.3 percent drop in output, after a 0.2 percent decline in 2015.

The economy was expected to grow 2.5 percent in 2017 and 3 percent in 2018.

Those projections, he said, were based on the assumption that uncertainty would abate, there would be a resurgence in demand and the ECB’s monetary policy would remain “accommodative.”


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