By Tasos Dasopoulos
Growth of over 3% and inflation of over 7% will be forecast for Greece, the summer forecasts of the Commission which will be published tomorrow, Thursday, in a climate of uncertainty about Europe’s energy sufficiency in the coming months.
In the big picture, the projections will not take into account the scenario of the permanent cessation of Russian gas to Europe, since it is still a “scenario”. It will, however, take into account the continued rise in inflation at the Eurozone and EU level, as well as the increase in interest rates which has already been announced by the ECB and will start from the 21st of the month.
With these data, the Commission will revise the scenario for growth, from the 2.7% it predicted in its spring forecasts in May, to a little over 2%, while the inflation forecast will also be “aligned” with the corresponding the ECB’s forecast for inflation above 7% this year, but with the prospect of a significant decline next year.
As far as the increase in interest rates is concerned, it will be characterized as a positive intervention, which will also contribute to the containment of prices despite the unfavorable international environment and the current increase in yields on European bonds.
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Forecasts for Greece
According to information, the forecasts for Greece will “see” GDP growth of just over 3% for this year, from 3.5% predicted last May, while the inflation forecast will be higher and will exceed 7.3%, from 6.3% predicted in the spring forecasts. For 2023, the Commission will once again predict growth of over 3% for Greece, while inflation will also drop to just over 2%. The positives for Greece include the very good start the economy made in the first quarter of the year with growth reaching 7%, despite the environment of high inflation. Also, the forecast for a full recovery of tourism, at the levels of 2019, and the maintenance of momentum in investments and exports, as well as private consumption, will be attached, based on the data of the first quarter of the year.
“Pillars” of development for the coming months, apart from tourism, will be public investments. Their funding is secured from the funds of the Recovery and Resiliency Fund, but also of the multi-year budget plan (the new NSRF) for the period 2021- 2027. With regard to measures to support the economy, the European Commission will emphasize the compatibility of what has been announced with the Commission’s general directives for emergency measures aimed at helping the economically vulnerable.
A possible risk is the interruption of Russian gas
The forecasts for both the EU and the Eurozone, as well as for Greece, will be highlighted as being subject to high risk, as energy is peaking and based on forecasts it will remain in a softer form for both 2023 and 2024. The possibility of the final interruption of the supply of Russian natural gas to Europe, although it is the dominant narrative in the meetings of the finance ministers of the Eurogroup and ECOFIN, as well as the last summits, it will only be mentioned as a possible risk without, however, adjusting the forecasts based on this scenario .
Source: Capital
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