Greek economy projected to grow by 2.2% in 2023, says Bank of Greece governor

The Bank of Greece has raised its economic growth forecast for Greece this year, according to the central bank’s governor, Yannis Stournaras. Presenting the bank’s annual report on Friday, Stournaras said that the Greek economy is expected to grow by 2.2% in 2023, and the inflation rate is set to fall to 4.4%, with the state budget expected to record a primary surplus of 0.7%. However, he warned that the economy still faces challenges and threats, mainly due to a deteriorating external environment and the prospect of a prolonged pre-election period.

Stournaras highlighted the remarkable progress made by the Greek economy, which grew by 5.9% in 2022, exceeding pre-pandemic levels in absolute terms. He also noted that foreign investment inflows in the last two years reached a 20-year record, reflecting renewed confidence in the outlook of the Greek economy. The unemployment rate fell below 2010 levels, thanks to labor market reforms that boosted flexibility, although the inflation rate reduced household incomes. The country’s debt was 171.4% of GDP, down 35 percentage points from 2020. Stournaras said that 2022 budget targets were achieved, and the primary deficit will be almost eliminated.

Turning to the banking sector, the central banker said that the return of banks to profitability was remarkable, and they were better positioned to absorb any turbulence from international markets. [AMNA]