The forecasts of international organizations for the economy

Of Tasos Dasopoulos

Far from the heavy losses that are expected to have larger economies in the Eurozone, Greece is expected to be found for 2022, based on the forecasts made at this time, for the course of the economy.

The… always conservative with Greece IMF, in the assessment of the economy based on Article IV, predicts that the economy will grow this year at a rate of 3.5%, ie 1% lower than the official budget forecast for growth of 4.5%.

The Fund praises the Greek authorities for supporting the economy during the two years of the pandemic, as it kept businesses afloat and reduced unemployment, and proposes continued support in the current energy crisis, with an emphasis on the financially vulnerable. He also acknowledged that the reforms carried out in recent years had helped the resilience of the economy, and said that the economy, the Development Fund, investment and tourism were among its drivers. At the same time, of course, he sees inflation rising to 4.5% for this year and falling to 1.9% in 2023.

The IMF forecasts, at this point in time, are almost identical to the informally revised forecasts of the Ministry of Finance as they will be reflected in the stability and growth program that will be sent to Brussels at the end of the month.

The DBRS

The Canadian company DBRS, which upgraded its credit rating to BB (high) on March 18, ie one step below the investment grade, also appeared optimistic about the growth of the economy. In his assessment, he stresses that the losses of the economy from high inflation will be about 1%. A few days later, on the 24th of last month, shortly before the Russian invasion of Ukraine, in a note issued for Greece, he predicted that GDP growth this year would reach 4.3% (from 4.4% forecast in December) and higher at 3.4% in 2023 (from 3.1% previously forecast). At the same time, the house estimated that unemployment will fall to 13.5% this year from 14.6% which was the previous estimate for 2022 and to 13.1% in 2023 (from 13.5% previously).

The Commission

In about a month from today, the Commission, having the data from the first two months of the war, is expected to issue its own spring forecasts for the whole of the EU, including the consequences of the energy crisis, as well as food inflation. which has begun to take on uncontrollable proportions.

In its winter forecast, announced in February, it had revised its forecast for Greece’s growth from 5.2% forecast last November to 4.9%. The revision was based on the losses it will have for the economy from high inflation, since then the war in Ukraine is still far away.

According to information, the Commission now estimates that the combination of high inflation in food and fuel, will reduce European GDP by about 1% to 3.2% from 4.2% previously forecast. If he estimates a similar slowdown in growth for Greece, we will have growth of 3.9% instead of 4.9%. In any case, the European Commission will appear more optimistic than the Ministry of Finance, as was the case in 2020 and 2021 during the pandemic.

However, one can not rule out that as long as the war in Ukraine is in progress, forecasts for Europe and Greece may deteriorate dramatically over time.