Why Citigroup expects a multi-year cycle of strong growth for Greece

A “complete” recovery from the pandemic would require the GDP of the eurozone countries to grow significantly above the pre-pandemic trend, Citigroup estimated in a special analysis by its economist Christian Schulz.

The rapid reduction in public debt that increased by 20 percentage points in the eurozone during the six years of the pandemic is unrealistic and perhaps not even desirable.

According to the bank’s calculations, a permanent increase in production by just 1 στην% of GDP in the eurozone would be enough to offset the debt increase of 20% of GDP during the pandemic period.

The ECB, on the other hand, would like a stronger recovery, and although inflation has already returned to pre-pandemic levels, this is not so important, as the central bank’s monetary policy is using almost the same means which were simply strengthened during the pandemic.

Greece

Regarding Greece, however, the bank’s forecasts are rather good, as in a separate report on the eurozone economies, Citigroup estimates that the Greek economy is entering a multi-year upward cycle of strong growth, while the Greek Recovery Plan commits the largest amount of resources as a percentage of GDP in the Eurozone reaching 16% of GDP for the next 6 years (of which almost 10% concerns grants).

It is characteristic that in its long-term forecasts for the Greek economy, it expects strong growth for at least the next 5 years.

In particular, the GDP growth rate for 2021 is estimated at 4.1% for 2022 at 6.5%, for 2023 at 3.9% for 2024 at 3.4% and for 2025 at 3 , 3%.