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Economy

Greek Central Bank Chief Cuts 2024 Growth Rate Estimate to 2.5 Percent

November 30, 2023

ATHENS – Greece’s accelerating growth with the COVID-19 pandemic mostly over, which hit 5.6 percent in 2022 and 2.4 percent in 2023, is seen slowing in estimates from Central Bank Governor Yannis Stournaras.

He told the site POLITICO that the growth is estimated for 2024 and 2025 to be 2.5 in both years, not the 3 percent in 2024 and 2.7 percent in 2025 that had been forecast earlier this year, that will be shown in a December report.

Statistically, that’s a setback although the comeback pace was outstripping even that of Germany, the European Union’s biggest economy, Greece’s rebound driven largely but what’s seen to be a record tourism year in 2023.
The economy grew 8.4 percent during the COVID year of 2021 despite lockdowns and a near halt in international air travel and despite the expected slowdown in the coming two years still represents a robust comeback.

The rising revenues have also cut the debt-to-Gross Domestic Product (GDP) ratio from more than 200 percent – now 165 percent – to 144.7 percent by 2025, the bank’s report will estimate.

The Paris-based Organisation for Economic Cooperation and Development (OECD) projected Greece’s growth at 2.4 percent in 2023 and 2.4 percent in 2024, under an economic survey.

The European Central Bank (ECB) is unlikely to start cutting interest rates before mid-2024, Stournaras told the news site, pushing back against market bets for a first cut as early as April.

“The current numbers betting on April seem a bit optimistic,” he told POLITICO. He said he sees the first rate cut “in the middle of next year” if inflation then is slightly below 3 percent, which would bring a sustained decline to 2 percent.

He said that ECB President Christine Lagarde said that, “We cannot reduce interest rates in the next two quarters,” and that, “This “means in the beginning of the third quarter of next year, we might. That’s how I read it.”

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ATHENS - If the Bank of Greece did not operate under the protection of the institutional framework of independence, after what happened in 2015, the country would have perhaps left the eurozone, Bank of Greece (BoG) governor, Yannis Stournaras, said on Saturday during the Kathimerini conference in a panel titled: "In the next 50 years, is Democracy safe?" Is Greece reformable?" "Who doubts that if it wasn't for the Bank of Greece, we might not be in the euro after the adventure of 2015?" he said.

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