Citigroup expects Greek growth to slow in the coming years for a range of reasons, but considers the prospect of the 2019 general election positive, arguing that it will almost certainly lead to an investor-friendly conservative government.
In its latest report on the global economic outlook, Citi points out that growth in Greece depends to a great extent on exports (mainly tourism revenues) and investments – with support from European Union funds – while private consumption remains weak and is not likely to strengthen as the population is shrinking at an annual rate of 0.4 percent.
At the same time, Citi notes, the savings index is negative, the credit contraction is continuing, and despite considerable reform efforts the competitiveness of exports has not matched improvements in other EU states.
Therefore the report sees growth dropping to 1.8 percent in 2019, against an official forecast for 2.5 percent, and easing further to 1.5 percent in 2020 and 2021, 1.4 percent in 2022 and 1.3 percent in 2023.
Citi adds the 2019 election will be good news, as New Democracy has a 12-percentage-point poll lead (37 percent against SYRIZA’s 25 percent), and its government will be more pro-markets and pro-business.