G. Stournaras at the Banking Summit: We are living the perfect storm after the Russian invasion of Ukraine

According to the governor of the Bank of Greece, Giannis Stournara, the “perfect storm” we are living in after the Russian invasion of Ukraine, which followed the outbreak of the pandemic, is causing stagnant inflationary tendencies.

Speaking at a banking conference, he argued that the war in Ukraine has strengthened all the vulnerabilities of the system and has complicated the situation. “Inevitably, the outlook for the economy and the financial sector is affected by uncertainties, and policymakers and market participants may need to navigate stormy and uncharted waters in the coming months,” he said.

Mr. Stournaras said that in terms of the Greek economy there are strong strong winds as in 2021 real GDP increased by 8.3%. At the same time, labor market developments are favorable with employment growth accelerating and unemployment declining. Greece is entitled to receive more than 70 billion euros in EU funds over the next seven years. About half of these funds (€ 30.9 billion) are related to the EU Recovery Plan (NGEU). The rest is structural funds from the EU budget 2021-2027.

However, he warned that “the road ahead is not paved with rose petals as the signs of the pandemic are still visible, while new and unpredictable challenges are more than apparent. The consequences of the Russian invasion of Ukraine are a significant negative shock on the part of supply, which is expected to negatively affect production and further increase energy prices.In addition, a possible further escalation of the crisis carries significant adverse risks to the outlook for the economy.

SOURCE: ΑΠΕ-ΜΠΕ