BoG raises Greek econ forecast for 2023, at 2.2%; inflation at 4.4%

The Bank of Greece (BoG) has revised, upwards, its forecast for Greek economic growth this year, with the development included in the central bank’s annual report, presented by Gov Yannis Stournaras on Friday.

Specifically, the BoG forecasts that the Greek economy will grow by 2.2 percent in 2023, while the inflation rate will east to 4.4 percent, on an annual basis.

The Greek state budget is expected to record a primary surplus of 0.7 percent.

Stournaras, however, stressed that the economy faces challenges and risks, mainly due to a deteriorating external environment but also from the prospect of a prolonged pre-election period in Greece. A general election will be held on Sunday, May 21.

Stournaras added that the Greek economy has exhibited notable progress.

In 2022, Greek GDP grew by 5.9 percent, exceeding the pre-pandemic levels in absolute terms.

Foreign investment inflows in the last two years reached a 20-year record, reflecting renewed confidence in the outlook of the Greek economy. The inflation rate reduced household incomes, but the unemployment rate fell below 2010 levels thanks to reforms which boosted flexibility in the labor market. The current account deficit grew to 9.7 percent of GDP in 2022, but this development was attributed to temporary factors, Stournaras said, adding that exports have doubled compared with 2010. The national debt was at 171.4 percent of GDP, down 35 percentage points from 2020.

Stournaras said 2022 budget targets have been achieved and that the primary deficit will be nearly eliminated. Commenting on the banking sector, he said the return of banks to profitability was remarkable.

“The banking sector is in a better position to absorb any turbulence from international markets”, he underlined.

The entire report is here: https://www.bankofgreece.gr/en/news-and-media/press-office/news-list/news?announcement=77da98c8-4ed6-4d98-a9a9-b6f3e0b538c3