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Greek Growth Seen at 2.2% This Year, Challenges Remain, Central Bank Says

Greece’s economy will grow by 2.2% in 2023, the country’s central bank said on Friday, confirming its previous forecast and urging the re-elected conservative government to continue pushing ahead with reforms.

The central bank said in its monetary policy report that growth was expected to reach 3% in 2024 and 2.7% in 2025, “if the geopolitical crisis de-escalates, energy prices continue to drop and the negative impact of the monetary policy’s tightening on the euro zone’s economy is contained.”

The biggest challenge for Greece’s economic policy was regaining an investment grade credit rating, it said. Prime Minister Kyriakos Mitsotakis, who stormed to victory in a national election on Sunday, has promised to help Greece regain that investment status within the year.

The bank added that reducing the country’s current account deficit was also a significant challenge. Greece emerged from international bailouts in 2018, nearly a decade after a debt crisis forced it to seek financial aid from its European peers and the International Monetary Fund to stay afloat.

Its 2022 current account deficit, at 9.7% of economic output, was mainly due to the increased energy prices and was expected to decline to 7% of GDP in 2023, the bank said.

Greece needs the implementation of prudent economic policy to achieve annual primary surpluses of around 2% of GDP, it added.

“Economic policymakers need to show accountability and commitment to preserve the sacrifices of the past decade and continue the progress achieved,” the central bank report said. 

Source: Zawya