Impact of credit crisis less severe

The global credit crisis is not having a major impact on the Greek economy due to the country’s limited exposure to the subprime market, a think tank said yesterday. Non-profit group the Foundation for Economic & Industrial Research (IOBE) said in its quarterly report that robust domestic demand – although weakened – will continue to be a main growth driver for the economy. A small deceleration in inflation by the end of the year is likely to provide a boost to consumption, the report added. «These facts show that the Greek economy is unaffected to a large extent, at least currently, from the international financial crisis,» IOBE said. Greece’s economy has been forecast to grow by 3.6 percent this year, according to the Finance Ministry, versus 1.3 percent in the eurozone. Some economists have forecast a more conservative expansion rate of slightly below 3.5 percent. IOBE pointed out that the crisis has boosted uncertainty among investors and consumers in Greece and other European Union states. «It is obvious that expectations and sentiment in all countries have been affected more by the international crisis and less by worsening real performances,» it added.