High growth will continue after the Olympics, says Garganas

SOFIA (Reuters) – Bank of Greece Governor Nicholas Garganas said on Saturday his country’s economic expansion would not decelerate after the Summer Olympics and should maintain its heady pace of growth at around 4 percent. Despite concern from some economists that Greece’s economy could slow once projects tied to the 2004 Olympics in Athens taper off, Garganas said further infrastructure projects in Greece would keep the pace of expansion steady. «We expect that we will continue to have the sort of rate of growth that we have had over the past four years, that is, growth of 4 percent,» Garganas told Reuters at a meeting of central bankers in Sofia. «Last year, it was 4.3, and this year we expect it to be around 4 percent. Next year should not be very different. Of course, some of the projects linked with the Olympics contributed, but this was not the main source of growth.» He said the same factors that have been the economy’s main drivers, infrastructure projects co-financed by the European Union and the Greek government, will continue to drive the economy. From around 22 billion euros in structural funds, Greece has absorbed around just under 16 billion euros, and the remainder «will really hold us until the year 2008,» Garganas said. «So far, infrastructure projects were mainly concentrated in Athens… partly because of the Olympic Games, but now, they are extending it to the rest of the country, so public investment will continue to be quite buoyant for the next 10 years,» he said. The OECD said in a report last week Greece’s economy would outpace the eurozone, but added momentum would slow after the Olympics. It sees Greek GDP growth at 4 percent this year and 3.5 percent next year. The government sees full-year 2004 growth at 3.7 percent.