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With improved growth forecasts and the Commission

By Tasos Dasopoulos

The European Commission is expected to make a significant revision for the growth of Greece for 2021 in the autumn forecasts that it announces tomorrow for all EU Member States from the 4.3% forecast last May, will now see growth above 6.1% officially provided by the Ministry of Education. In the absence of data, it will refer its final revision for 2021 to its winter forecasts.

The dynamics that the Greek economy has developed after the opening of the market in May, will be recorded in its autumn forecasts by the European Commission, revising the growth for 2021 over the 6.1% provided for in the preliminary draft budget.

Competent sources of YPOIK assure, however, that the new forecast, although it will be significantly higher than the one for growth of 4.3% in May, will not be the final one. Once the year is over, the Commission will revise its forecasts again, approaching the Bank of Greece’s forecast for 7% growth in 2021, probably in its winter forecasts in February.

The need for a new review stems from the fact that the official figures on which the Commission’s forecasts are based now expire in September. Therefore they have not incorporated the good course of tourism for October and November. These revenues will further increase the GDP of the 4th quarter. The expected GDP growth due to the low base, created by the lockdown in which the economy was last year from the beginning of November, will be strengthened by the revenues of the extension of the tourist season, together with the high performance they continue to have, exports, investments and building activity.

During the collection of forecast data, European Commission officials acknowledged the prospects for the economy to grow in 2021 at a rate much higher than 6.1%. However, they clarified to the officials of the Ministry of Finance that they can not incorporate in their data trends from “precursor indicators”, but they will have to walk based on the officially published data. In the absence of data for GDP in the third quarter, they will proceed with a revision of growth for this year to 6.3% -6.5%. This, only with the revision of the receipts from Tourism to 55% of 2019 recorded by September This performance is significantly higher than the 45% of receipts of 2019, which were projected last spring. At the same time today there are indications that revenues from tourism are expected to reach or even exceed 12 billion euros or 65% of revenues in 2021 and perhaps slightly higher.

The reservations

At the same time, the technocrats in Brussels will not hide that the continuation of the pandemic due to the slowdown in the rate of vaccinations from the summer onwards, but also the price increases of energy products and “narrowing” of the supply chain, raise concerns for the Greek GDP. Regarding 2022, it will note the impetus that the economy will give the utilization of the funds of the Recovery Fund, forecasting growth of 4.5%.

In the special report on the forecasts for Greece, the European Commission will once again pay tribute to the Greek Government for the rapid and effective response to both the effects of the pandemic and – most recently – the price increases in gas, oil and electricity. In fact, it will be pointed out that Greece provided the third largest package of support measures within the Eurozone countries, against the pandemic, channeling into the economy a total of 41.8 billion euros, managing to support jobs and businesses.

Finally, it will be almost identical with the Greek forecasts for the deficit, which will be set at 10% this year, with the prospect of falling to 3.7% in 2022, due to the gradual withdrawal of measures to support the economy.

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Source From: Capital

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