BoG Gov: Coronavirus mutations – danger for the economy

According to the Governor of the Bank of Greece, Giannis Stournara, the forecasts for a rapid recovery of the Greek economy from now on are subject to significant risks related to the evolution of the pandemic nationally and globally.

The report on Monetary Policy 2020-2021 submitted today to the Speaker of the Greek Parliament and the Council of Ministers, forecasts GDP growth of 4.2% this year, 5.3% in 2022 and 3.90% in 2023, while no performance is unlikely to be better under certain conditions.

However, Mr. Stournaras points out that health risks remain high. According to the report, despite the fact that the vaccination program is progressing smoothly, the spread of coronavirus mutations is a source of uncertainty and any worsening of the pandemic could lead to a sluggish tourist season and delay the return to normalcy.

Do not interrupt support measures

In addition, he once again called on the government not to rush into withdrawing measures to support the economy, as in such a case the possibility of increasing corporate bankruptcies and non-performing loans (NPLs) is likely, as well as contributing to a deteriorating labor market. An additional risk, according to Stournaras, stems from a possible delay in the absorption of European resource.

On the other hand, the central banker emphasizes, "faster implementation of reforms and full absorption and efficient use of European resources may lead to greater investment growth and faster economic recovery during the forecast period."

He stressed that "given the significant improvement in the consumer confidence index in recent months, in the near future it is likely that households will increase their consumption to a significantly greater extent than expected, utilizing the...