The International Monetary Fund is raising the bar for the prospects of the Greek economy several steps, both for 2021 and for 2022. The fund’s economists, in the annual report on the global outlook, revise the estimates for the Greek GDP upwards looking at growth rate this year to 6.5% from 3.8% of estimates from before summer. For 2022 the rate is projected at 4.6%, from 5% in previous estimates. The deficit is estimated at 7.4% this year and falls to 5.1% in 2022, from 1.1% of GDP seen by the Greek financial staff.
The average for growth in the Eurozone is at 5.2% for 2021 and 4.4% in 2022, while inflation estimates in the euro area member countries are at 2.2% for 2021 and 1.8%. % in 2022. For Greece this year the Fund forecasts show -01% and for 2022 at + 0.4% which is close to the Greek forecasts. The inflation rate, according to the draft budget, is expected to be moderately positive in the whole of 2022 (0.8%).
The Fund’s forecasts are to be added to a series of upward revisions for the Greek economy. The financial staff also revised the growth rate for 2021 from 3.6% to 6.1% while for 2022 the growth forecast is 4.5%. The cumulative growth of the years 2021-2022 increases to 10.8%, 0.8% higher, signaling that in 2022 not only is it expected to restore the level of domestic product in 2019, but this will increase further, by 1.7% .
The average forecast of international and domestic analysts sees the recovery for 2021 rising to 7-8%. In particular, HSBC expects GDP growth of 7.5% (from 4.5% previously) and 5% (from 6% previously) for 2022 for this year. It expects strong growth rates in the third quarter, given that Tourism shows clear signs of recovery, while the dynamics of the economy appear strong despite the fact that Greek GDP is even 20% lower than the levels it was before the Greek debt crisis in early 2010. The above forecasts are included in the list of similar estimates. Like Moody’s, which expects GDP growth rate of 8.2% for 2021, compared to 8% for UniCredit, 8.5% for Capital Economics, 8.8% for Citigroup, 8.2% for Oxford Economics, 6.9 % of Alpha Bank, 7.5% of National Bank of Greece, 8.3% of Piraeus Bank, 7.9% of KEPE, 8.6% of Scope Ratings, 7.9% of UBS etc.,. It is also noted that growth of 4.7% at average levels is expected for the whole of 2022 by all economists.
Deficit of 7.4% in 2021
On the fiscal front, the Fund forecasts for 2021 a deficit of -7.4% and in 2022 it will decrease to -5.1%. According to the preliminary draft budget for 2022 – submitted to the Greek Parliament – the primary deficit will be reduced from 7.3% of GDP this year to 1.1% of GDP at the end of 2022. This is because tax revenues, according to with the Ministry of Finance, will be increased by 4 billion euros, reaching 49.5 billion euros in 2022 from 45.4 billion euros in 2021 Of these 2.2 billion euros are expected to come from indirect taxes and 1.8 billion euros from direct taxes due to the full operation of the economy and the restoration of income. On the other hand, spending will be 6.3 billion euros reduced from 70.7 billion euros this year to 63.4 billion euros in 2022, due to the significant reduction in economic support measures that came close this year. at 16.6 billion euros.
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