Bank of Greece governor raises issue of maintaining confidence in economic policy Yannis Sturnaras as the main goal electionsand in this context, he urged political forces to show “prudence and responsibility” and support “national economic goals in order to maintain an atmosphere of confidence in their prospects.” Greek economy“.

Sending a clear signal to the next government from the hall of the general meeting of the bank’s shareholders, where he presented the governor’s report yesterday, Mr. Sturnaras emphasized that “the continuation of sound economic policies, fiscal policypreserving the important achievements of the reform efforts of the past and creating a new reform program for the government, which will appear after the national elections, with a focus on modernizing the public sector and renewing institutions and infrastructures. be a beacon to guide us through the turbulent waters of the new economic reality.”

The head of the central bank explained that the good performance and remarkable resilience demonstrated by the Greek economy in recent years in the face of international crises is largely the result of support from European institutions. This, in turn, was the result of credible fiscal policy plans and reforms, and therefore needs to be continued.

“It is a fact,” he said, “that a possible prolonged political uncertainty could undermine the climate of confidence created in recent years. However, the most significant risk to the economy is a return to the ineffective policies of the past and the disruption and/or curtailment of reform efforts. Memories of the painful adjustment made in previous years are still fresh to remind of the high economic and social costs required to correct chronic imbalances in the economy.”

The modernization of the public sector, the modernization of institutions and infrastructure should come to the fore after the elections.

The Bank of Greece revised its forecasts for the Greek economy, as the government has already done. Thus, he now forecasts a growth rate of 2.2% for this year (versus a 1.5% forecast in December and against the government’s 2.3%). As for the primary deficit, it is consistent with the new government estimates that it was close to zero in 2022 and a primary surplus of 0.7% of GDP is projected in 2023. Inflation is estimated at 4.4% against the government’s forecast of 4.5%. “Greece has managed in two years, from 2021 to 2022, to achieve one of the largest fiscal adjustments in Europe and collectively record the largest de-escalation of public debt, which has returned to levels below pre-pandemic levels,” said Mr Stournaras. He also pointed to a decline in unemployment to 12.4% in 2022 and an increase in the competitiveness of the economy.

“thorns”

However, there were also “thorns”. The current account deficit widened significantly to 9.7% of GDP in 2022, although Mr Sturnaras said this was largely due to current factors, due to the pandemic and the energy crisis, while overall exports of goods and services doubled compared to 2010.

In addition, a sharp acceleration in inflation to 9.3% in 2022 “has reduced real household incomes and undermined the economic outlook.”