Growth estimates revised upward
Forecasts by the government, the Bank of Greece and economic analysts on this year’s growth rate are being revised upward to 2-2.5%, compared to the 1.8% that had been foreseen in the 2023 budget.
According to sources, the Bank of Greece now sees GDP growing at a rate of 2.2%, as will emerge from the governor’s report on April 9, against a forecast of 1.5% in December 2022 in its interim report.
The government is making the necessary adjustments in view of the Stability Program 2024-2027, which it will submit to Brussels by end-April, with Finance Minister Christos Staikouras revealing on Tuesday on Skai that the new growth forecast is 2.3%. He also said the inflation forecast is being revised to around 4.5%, from the 5% forecast in the budget. Finally, the forecast for unemployment is below 12%, he said, compared to the budget estimate for 12.6%.
Corresponding adjustments are being made overall to market forecasts. A few days ago, National Bank revised its forecast for growth this year to 2.5%, citing the good results of 2022 as reasons, with the GDP growth rate at 5.9% according to ELSTAT, leading to a greater carry-over into this year, but also the high performance of the indicators of the first months of this year; they include economic sentiment, the PMI, the tax revenue overshoot, tourism arrivals etc. The drop in the price of natural gas has also contributed decisively to stimulating growth.
Alpha Bank also sees this growth at 2.5% this year.
On the other hand, the recent banking crises in the US and Switzerland mean a continued climate of uncertainty, which is heightened by the upcoming elections and risks to political stability.
Staikouras was reassuring on the banking crisis, saying that apart from the guarantee of 100,000 euros per depositor, the banking system is stronger, as: bad loans have shrunk, deposits have increased by €50 billion in the last four years, the lenders’ capital adequacy ratio is at 17.5% and banks have strengthened their profitability. Nevertheless, he recognized that both the banks and the economy are exposed to any external crisis.
