By Tasos Dasopoulos
Greece will reverse the cycle of primary deficits and in 2023 will have the highest primary surplus in the EU. which will reach 1% of GDP, the highest among all EU countries. according to the Commission’s forecasts, the Minister of Finance, Christos Staikouras, emphasized today at the Economist conference.
The Minister of Finance referred to the significant recovery of the economy in 2021 and emphasized that this year, despite the energy crisis, Greece will achieve growth of over 3.1%. He also pointed out that the mix of growth has changed and now GDP is boosted more by exports and investment. He even noted that foreign direct investment reached 5 billion in 2021, which is a record, while for the first five months of 2022, foreign direct investment reached 3 billion euros.
Answering a question on the issue of high inflation, Mr. Staikouras emphasized that in Greece, as in Europe, inflation is high and due to the low base, that is, the very low inflation we had in 2021. He emphasized that the European Central Bank has been constantly revising its forecasts and now predicts inflation higher than 7% for this year. However, he concluded by saying that based on today’s data, inflation will be with us in 2023 and 2024 as well.
The Minister of Finance reiterated that Greece will continue in 2022 the prudent fiscal policy that will reduce the primary deficit from 5% of GDP in 2021 to 2% of GDP and move to a primary surplus of 1% in 2023. At the same time, he is planning from the fiscal space that existed and will exist over time to finance a new package of support measures for businesses and households over time.
Asked about interest rate hikes by the ECB and the pressure Greek bonds will face due to the high debt-to-GDP ratio, he reminded that Greek debt remains sustainable with most of it in the hands of the official sector with low interest rates and long repayment period. Responding specifically to pressures due to interest rate hikes, he stressed that Greece has sufficient cash reserves to absorb market turbulence.
Source: Capital
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