Stournaras sends BoG Interim Report on Monetary Policy to Parliament

“The Greek economy continued to grow in 2024 at a satisfactory rate, significantly higher than the average rate of the euro area member-states,” Bank of Greece governor Yannis Stournaras said in his introductory letter to Parliament President Constantinos Tasoulas, to whom he sent the central bank’s Interim Report on Monetary Policy 2024 on Friday.

Stournaras said that general inflation had slowed by remained higher in Greece relative to the Eurozone, as a persistently high services’ inflation prevented its easing.

Based on the current projections of the Bank of Greece, he said that GDP growth was forecast to be 2.3% in 2024, rise to 2.5% in 2025 and decline slightly to 2.3% in 2026 and 2% in 2027. Consumption is expected to be the main driver of growth, while investments and exports will continue to make a positive contribution, he said.

“The prudent fiscal policy pursued in recent years and the efforts to combat tax evasion are bearing fruit, as high primary surpluses are achieved without the need to take restrictive measures and the public debt as a percentage of GDP has declined. The risks to the sustainability of public debt are estimated to remain limited in the medium term, provided the commitment to the achievement of the fiscal targets and the effective utilisation of European resources,” the letter said, adding:

“In the long term, increased uncertainty is forecast, as the gradual refinancing of debt obligations to the official sector on market terms will increase the exposure of the Greek State to interest rate risk and market risk, which eliminates the scope for fiscal easing.”  Stournaras noted that the successes in recent years are an indication that the economy is on the right track but that the effort to recover from the 10-year debt crisis was not over. “Enhancing overall productivity through reform and innovation, together with increasing investment and labour force participation, is critical to accelerating economic growth, improving living standards and a convergence of GDP per capita with European levels”.

 The Interim Report on Monetary Policy 2024 will be sent to the competent parliamentary committee of Economic Affairs.

Source: pagenews.gr