Re­ports point to eco­nomic re­cov­ery but also the risks

KEPE says GDP could grow by up to 20 pct in the next six years

Kathimerini English - - I N T E Rv I E W -

The Greek econ­omy may be re­bound­ing, but there are still risks that could de­rail this re­cov­ery, ac­cord­ing to three sep­a­rate stud­ies pub­lished yes­ter­day by the Cen­ter of Plan­ning and Eco­nomic Re­search (KEPE), BNP Paribas and the Economist.

KEPE said the econ­omy has been in the re­cov­ery stage since the sec­ond quar­ter of the year and that ac­cord­ing to its study’s base­line sce­nario the coun­try’s gross do­mes­tic prod­uct could grow at an av­er­age an­nual rate of 2.4 per­cent up to 2020. That would lead to the ac­cu­mu­la­tion of 17 per­cent GDP growth by 2020, with the more op­ti­mistic sce­nario rais­ing that fig­ure to 20 per­cent.

How­ever it noted that although growth rates are ex­pected to be strong in the com­ing years, the re­cov­ery ap­pears frag­ile for now owing to cer­tain per­sis­tent eco­nomic prob­lems and the un­cer­tainty over ne­go­ti­a­tions with the coun­try’s cred­i­tors.

“The un­cer­tainty ap­pears to be re­flected in the spread of Greek bond yields [from the Ger­man bund yields] and the [re­cent] de­cline of prices on the Athens Stock Ex­change,” KEPE said in its re­port.

The Economist ar­gued that Greece was the sur­prise in the eu­ro­zone’s gloomy fi­nan­cial land­scape, but added that the po­lit­i­cal risk could un­der­mine the econ­omy’s re­cov­ery. It warned that An- to­nis Sa­ma­ras’s coali­tion gov­ern­ment, which “steered the coun­try away from the abyss” after two con­sec­u­tive elec­tions in 2012, may tum­ble early next year. The foun­da­tions of this year’s growth were laid when the “Grexit” threat was ban­ished, it said, adding that if con­cerns re­turn, the “Gre­cov­ery” will cer­tainly be af­fected.

BNP Paribas es­ti­mated that the big­gest risk for the econ­omy will be the pres­i­den­tial elec­tion in Fe­bru­ary, but the econ­omy is set to grow 0.8 per­cent by the end of the year be­fore ex­pand­ing a fur­ther 2 per­cent in 2015 and 2.9 per­cent in 2016. It also an­tic­i­pates a drop in the debt from 174.9 per­cent of GDP this year to 166.7 per­cent in 2016.

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