BoG asks for fis­cal forecast re­vi­sion

Kathimerini English - - Front Page - YIAN­NIS PAPADOYIANNIS

The Bank of Greece is call­ing for a re­vi­sion of the macroeconomic fore­casts on Greece, not­ing that the ones on which the 2016 state bud­get and the re­cently ad­justed bailout agree­ment were based did not take into ac­count the UK’s exit from the Euro­pean Union and its im­pact on the Greek econ­omy.

In its re­port on the course of the coun­try’s credit sys­tem, the cen­tral bank noted on Tues­day that the pos­si­bil­ity of par­tic­i­pa­tion of Greek state bonds in the Euro­pean Cen­tral Bank’s quan­ti­ta­tive eas­ing pro­gram, com­bined with the restora­tion of cheap liq­uid­ity from Frank­furt, will have a sig­nif­i­cant pos­i­tive im­pact on the re­sults of Greek banks, amount­ing to some 400-500 mil­lion eu­ros in to­tal.

“How­ever, the big­ger eas­ing of pres­sure on banks’ liq­uid­ity and the cost of fund­ing will also de­pend on the im­ple­men­ta­tion of the macroeconomic fore­casts on Greece that have not fac­tored in the fi­nan­cial ef­fects of a UK exit from the EU,” the BoG noted, ask­ing for a down­ward re­vi­sion of the fore­casts.

The cen­tral bank also warned that de­posits will not re­turn to the lo­cal sys­tem as long as cap­i­tal con­trols are not fully lifted. How­ever, it added, the re­lax­ation of restric­tions will have to be a grad­ual process.

The Bank of Greece says cap­i­tal con­trols must be lifted grad­u­ally, at a steady pace.

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