Risks threaten optimistic Greek growth forecasts
Wednesday, January 3, 2024
Significance
After the 2021-22 post-pandemic rebound, growth is stabilising at around 2%. Barring new external shocks, it is expected to remain at this level in the coming years. Improved macroeconomic conditions and its investment-grade rating is making Greece more attractive for foreign capital, helping to narrow the large investment-gap legacy of the crisis years.
Impacts
- Simultaneous tightening of fiscal and monetary policy will constrain growth in 2024.
- Better access to global capital markets after the investment-grade uprating and high cash reserves provide a cushion to the public finances.
- Improved profitability and ongoing privatisation in the banking sector will enhance financial stability.