Experts predict slowdown in Greek economy

Experts predict slowdown in Greek economy

Greece's economy is, and will remain, in a slowdown until at least July, the Organization for Economic Cooperation and Development (OECD) projects while describing a general trend of slower growth across the eurozone, Greek experts told Xinhua.

Domestic and international factors will contribute to Greece's failure to meet its growth target for 2019 — an election year.

After losing some 25 percent of its annual gross domestic product between 2009 and 2017, Greece has been hoping to build on its estimated growth rate of 2.1 percent last year to regain some of the ground lost as soon as possible.

The government in Athens forecasts a 2.5 percent expansion according to the 2019 state budget.

However, the composite leading indicators the OECD uses to forecast the acceleration or deceleration of economies point to a slowdown in Greece that started in May 2018 and will continue until at least July 2019, according to a report published last week.

This follows the trend set across the eurozone by the likes of Germany, France and Italy, the OECD noted.

Greek experts agree that the local economy is shifting down a gear, but disagree on the extent to which local developments are to blame.

Nikos Theocharakis, professor of economics at Athens University, told Xinhua that projections "show that growth will slow down to some 2 percent, but not below that this year."

"Things are changing rapidly internationally, for example in Germany, the U.S. and China, but as things stand right now the growth rate in Greece should not drop any further, as there are no domestic factors to blame," Theocharakis explained.

Athens University economics lecturer Nikolina Kosteletou agreed that the signs of an economic slowdown are evident.

"This was quite expected, as the economies move in circles, and it would be good not to have too intense fluctuations. One can see the drop in the Greek stock market and various economic indexes that point to a slowdown, as is also obvious from the real estate market that is losing steam," Kosteletou said.

She went on to mention the political factor that international rating agencies and analysts also cite as a cause for uncertainty.

"A rapid settlement of political issues through an early election would certainly help," said Kosteletou, pointing to property buyers who are interested in buying Greek assets but opt to wait.

"Investors arrive from countries like China, they locate the properties they would like to buy and decide which ones they will acquire, but choose to wait for the time being, to see what happens."

Theocharakis disagreed, countering that an early election would hardly change anything in the economy.

"There will be no differentiation whichever of the parties comes into power," he said, referring to the ruling leftist SYRIZA party and the poll-leading conservative opposition New Democracy party. "The elections cannot take place any later than October anyway, which is fairly close," he added.

Kosteletou further identified the credit sector as another domestic cause of the economic slowdown.

"Local banks remain in trouble, they still have a huge backlog of bad loans and they cannot assist the economy as much as they should," Kosteletou told Xinhua.


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