Citigroup sees a slowdown from 2019
In contrast to official forecasts, Citigroup warned in a report issued on Thursday that the Greek economy will enter a period of slowdown from next year to 2022 at the earliest, with Greek sovereign bonds remaining below investment grade during that time.
The grim forecast with modest growth rates from 2019 is based on the fact that the ongoing fiscal austerity – due to the targets set for the post-program period – will continue to take its toll on growth. Therefore, after this year’s 2 percent rate, the highest since 2007, the economic expansion will ease to 1.6 percent in 2019 and 1.3 percent in 2020 and 2021 before a slight acceleration to 1.4 percent in 2022, Citigroup estimates.
It further notes that the weak growth rates make long-term debt sustainability doubtful, even after the Eurogroup decision for alleviation, unless the Europeans allow for less ambitious primary surplus targets.