Bank of Greece Governor Sees Boom Times Back for Economy

September 26, 2022

ATHENS – Happy Days are here again in Greece even during the waning COVID-19 pandemic because a tourist-driven economy will bring 6 percent growth, said Bank of Greece Governor Yannis Stournaras.

That’s far more than expected and needed because the government is spending more than 9 billion euros ($8.69 billion) into putting up subsidies for soaring energy costs crushing household budgets.

But even with the windfall, the New Democracy government said there’s not enough money to cut a 24 percent Value Added Tax (VAT) on food prices that is hurting supermarket sales.

Speaking at The Economist conference, Stournaras said the acceleration of the economy won’t last long though and that it would go up only about 2.8 percent in 2023 even with tourism monies.

He said that the Greek economy – bolstered by 32 billion euros ($30.89 billion) in European Union COVID loans and grants, with no indication how it was spent – has performed better than other countries.

The combination of rising interest rates and rising energy prices will likely drive down the Eurozone economy in 2023 closer but Greece can sustain itself better, the state-run Athens-Macedonia News Agency AMNA said.

Finance Minister Christos Staikouras said he was “realistically optimistic” that Greece can – and will – move to high, sustainable and socially just growth and prosperity for all, with 2023 elections coming.

He told the conference that the economy’s growth is building confidence as the government is also seeking more Foreign Direct Investment (FDI) and luring big businesses and the Information Technology (IT) sector.

He said Greece’s Gross Domestic Product (GDP) will rise to 210 billion euros ($202.69 billion) in 2022 and to 220 billion euros ($212.34) in 2023, an increase of 5.3% this year and a little over 2% next year, while noting that this growth will be combined with policies that ensure fiscal stability.

He didn’t explain why his figures differed from those of Stournaras for the growth rate nor what the implications would be although the ministry has said there are variations, such as whether the pandemic would worsen.

He said that FDI in 2021, when COVID was still raging, was 5 billion euros ($4.83 billion) that was the highest in the last 20 years and that the trend has continued into 2022, rising 90 percent in the first half over 2021.

Exports now account for 41 percent of the GDP, double that before the Coronavirus struck early in 2020, noting that Greece exports even more than France, Italy and Spain, including high-tech goods..

Unemployment that hit record highs during the 2010-18 economic and austerity crisis and remained the highest in the EU for years has fallen by some 6 percent, especially among females and the young, he said.

Banks’ bad loans that soared because of austerity-driven pay cuts, tax hikes, slashed pensions and worker firings have been reduced, especially through selling them off to vulture funds hounding people for repayment.

The so-called Non-Performing Loans (NPLs) were 14.8 billion euros ($14.28 billion) at the end of the first half of 2022, about 10 percent of total monies that had been loaned out.

That was a dramatic drop from the 75.3 billion euros ($72.68 billion) or 44 percent of the total in 2019 although the banks were held harmless, given 50 billion euros ($48.26 billion) in state aid.

Greece also has just ended so-called enhanced surveillance – the European Union’s checking the books – with the August, 2018 end of 326 billion euros ($314.65 billion) in international loans that didn’t bring down the debt.


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