The governor of the Bank of Greece is optimistic about the course of the Greek economy, despite the impending recession in the eurozone. Yannis Sturnaras.

In an interview with Politico, his commander TTE predicts that the Greek economy’s growth rate will close at 6% this year, while for 2023 he argued that the country will be less affected by the trade-off between growth and inflation as the economic outlook remains positive.

“The Bank of Greece thought we would have a growth of 3.2% this year, but now we are revisiting it to 6% due to much higher tourism revenue,” he said, adding that it appears that consumers are aggressively spent all their savings accumulated during the crisis. pandemic. He also calculated that if we take into account GDP growth rates for 2021 and 2022, it is likely that the average growth rate will be 3% over the Recovery and Resilience Fund’s time horizon (2022-2026).

For the entire eurozone, he estimates inflation next year will be below the 5.5% calculated in the base case, while he predicted that there is a growing risk that the eurozone economy will be plunged into recession. He even cited a number of factors, such as the slowdown in the third quarter to 0.2% and the rapid deterioration in business climate indicators recorded in relevant surveys.

Referring to the policy measures taken by the ECB to curb inflation, he argued that in addition to monetary and fiscal policy, it is necessary to move in a restrictive direction. “If we want to reduce inflation in the current environment without causing a serious blow to financial stability and without excessively raising interest rates, monetary and fiscal policy cannot move in opposite directions,” Mr. Sturnaras said, adding: “If fiscal If the policy is too lenient, then, unfortunately, this means that interest rates will skyrocket, which we do not want under any circumstances.”

Finally, the central bank has recommended cautious moves regarding the upcoming bond cut of nearly $5 trillion. euros held by the ECB. Any steps should be taken cautiously and gradually as quantitative tightening reinforces interest rate hikes across the entire yield curve,” Mr. Sturnaras stressed. “A reduction in the size of central bank balance sheets to pre-crisis levels could lead to a sharp rise in government bond yields internationally and wider spreads for vulnerable countries, with serious implications for financial stability and economic prospects,” the report said.