The Bank of Greece (BoG) will revise its forecasts for the growth rate of the Greek economy upward this year, its governor Yannis Stournaras said on Wednesday during a radio interview.
Stournaras said that BoG’s original forecast was for a GDP increase of 3.2% in 2022, but this he explained was based on the premise that travel receipts would reach 80% of 2019’s receipts. Present indications point to a 100% increase this year, he noted.
Looking ahead at the government support already provided or being planned for a difficult winter season ahead, Greece’s central bank governor cautioned against exceeding some fiscal limits, especially as Greece is aiming for investment-grade ranking. a goal he termed “national” and “absolute”. Greece can reach the goal within 2023, the BoG governor asserted, but it also must return to primary surpluses the soonest possible in order to be able to pay the interest rates of public debt that amount to nearly 2.2% of GDP.
The government spent nearly 40 billion euros on the coronavirus pandemic, he noted, which is about how much the public debt rose. The government is also subsidizing electricity bills, he said, stressing that “the government ment is doing the best it can; in my opinion, it cannot do anything beyond that.”
In terms of interest rates, Stournaras said they will not rise by much. “Central banks will raise interest rates as inflation rises, at most until the end of 2023. Then we will start reducing them,” he asserted.
SOURCE; ANA-MPA
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