Today, Monday, the Governor of the Bank of Greece, Mr. Yannis Stournaras, will present the Bank of Greece’s (BoG) annual report for 2023, focusing on both the good performance of the economy, which has made the country an international “success story,” and on the challenges – both domestic and external – that emerge.
Specifically, from the podium of the 91st annual ordinary general meeting of shareholders, Mr. Stournaras is expected, among other things, to refer to the data that make the Greek economy more resilient compared to the rest of Europe, having achieved a growth rate of 2% last year compared to 0.4% in the euro area. Regarding the next three years, the BoG estimates that Greece’s GDP will increase by 2.3% in 2024, 2.5% in 2025, and 2.3% in 2026, compared to 0.6%, 1.5%, and 1.6%, respectively, in the EU.
Inflation, the sudden acceleration of which prompted the European Central Bank (ECB) to change the direction of its monetary policy, leading to successive increases in key interest rates, stood at 4.2% for Greece and 5.4% for the eurozone last year. The BoG’s forecasts suggest further moderation until 2026, specifically to 2.8% in 2024, 2.2% in 2025, and 2.1% in 2026 for Greece, and to 2.3%, 2%, and 1.9% respectively for the EU. In view of the ECB’s upcoming meeting this Thursday, data indicating inflation at 2% will unlock decisions on interest rate cuts. As the BoG Governor emphasized in an interview with “Proto Thema,” “reducing interest rates four times this year, by 25 basis points each time, is feasible.”
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At the same time, according to the BoG, maintaining a primary surplus of 2% of GDP in the general government on an annual basis should be non-negotiable. In this context, it “sees” a surplus of 2.1% in 2024 – up from 1.4% in 2023 – and 2.3% in 2025-2026, compared to a primary deficit of 1.1%, 0.9%, and 0.8% respectively in the eurozone. As for the debt, it remained stable in nominal terms in 2023, but as a percentage of GDP it decreased from 172.6% of GDP in 2022 to 161.9% in 2023, with an expected further decrease to 138.9% by the end of 2026.