The draft budget for 2023, presented to Parliament last week, was described by international house economists who spoke to K as “somewhat optimistic”, as was the uncertainty due to the energy crisis, geopolitical instability and a possible severe recession in the eurozone. , creates problems for the Greek government in development and finance, and especially with regard to investment.

“The government’s commitment to achieving a primary surplus next year remains unchanged. However, whether these forecasts are realistic or not depends not only on her will, but also on a number of other factors that may lead to a larger slowdown in economic activity next year, which will lead to lower tax revenues and / or other factors affecting projected spending. . such as higher energy prices,” Spiridula Tsima, deputy vice president of the DBRS rating agency, notes in K. The House of Representatives is positive about Greece’s commitment to fiscal adjustment, but at the same time notes that the risks have increased. “We believe that rebuilding the fiscal accounts is a positive step, but it is also important to maintain a mix of fiscal policies that does not hinder growth,” Ms. Jima stresses.

The Greek government’s forecasts for growth are 2.1% higher than most houses, with some not ruling out the possibility of Greece entering recession. At the same time, they note that the revision of the primary surplus to 0.7% of GDP from 1.1% previously is on the right track, although the target is still difficult to achieve given the international environment.

“Despite the fact that the budget targets for 2023 have been lowered, the target for the primary budget surplus is still a bit optimistic,” Paolo Griniani, chief economist at Oxford Economics for Greece, said in K. This, he explains, is mainly due to assumptions about the Greek economy. “The government continues to expect positive growth in 2023, while we expect a slight contraction in GDP due to the ongoing energy crisis, higher inflation and interest rates.” In addition, Mr. Griniani notes that the recent increase in 10-year bond yields could negatively affect public finances by about 0.2-0.4% of GDP. “Consequently, we believe the fiscal balance will worsen in 2023 as the government needs more support for the economy than expected.”

While HSBC sees the new target for a primary surplus of 0.7% of GDP in 2023 as more realistic, it still sees a small primary deficit and an overall deficit of 2.8%. “Part of the difference is likely due to our less optimistic view of the economic outlook, despite support from the NGEU,” said Fabio Balboni, chief economist at the bank, to K.

The growth forecast for most households is below the government’s target.

UniCredit forecasts significantly lower GDP growth next year, at 0.7%, as the large contraction in GDP expected in the last quarter of 2022 helps lower forecasts for 2023. next year, given its lower dependence on Russian gas compared to other eurozone countries,” notes Tulia Bouko, head of research at UniCredit, in K for Greece.

While Greece has made significant strides on the investment front, economists say they do not see the country as a hotspot for investment as envisaged by the government, with investment expected to rise by 16% in 2023, and this is due to a deteriorating external environment. and trust in general.

“Greece sees very positive developments in the investment sector, although in this case we have a more conservative view. We forecast strong growth in fixed investment in 2023 of more than 7%, despite a recession led by NGEU and government support,” said Griniani of Oxford Economics, while stressing that foreign direct investment in dollars is at an all-time high. positive signal from international investors. “However, there are a few risks that could cloud the investment environment very quickly, and most of them are the war in Ukraine and rising geopolitical tensions with Turkey,” he warns.

HSBC sets the investment bar even lower. “We believe that next year investment will decrease (+5.2%) due to the deterioration of the external outlook and confidence,” said Mr. Balboni.

“Investment, especially in high-value-added sectors that create new jobs, are important steps to improve the economic outlook,” says Ms Jima of DBRS, but she stresses that the investment gap remains high. “Greece performs poorly on global governance indicators compared to eurozone countries. We believe that continued reforms that improve the business environment, the efficiency of public administration, the judiciary, the institutional framework, a simple and competitive tax system, and political stability are factors that create good conditions for investment.”