IOBE Trims Greece’s Growth Forecast Due to Lagging Bailout Progress

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The Greek economy will grow by up to 1.5 percent in 2017, below January forecasts by the Foundation for Economic and Industrial Research (IOBE) which had placed growth at 1.5 to 1.8 percent, but the lingering bailout negotiation process continues to fuel uncertainty.

“The bailout review, once again a protracted process, has consequences that we have seen in the past – it exacerbates uncertainty,” the think-tank said in its quarterly economic review released on Wednesday.

“Households and businesses have postponed their decisions until the new fiscal measures and reforms are finalized, which has a negative impact on economic activity.”

The IOBE estimates that 12-month consumption will run at a 1 percent rate under the condition that bailout negotiations do not delay.

“Any further delay in the agreement with Greece’s lenders poses the risk of transforming the economic crisis into social decline,” said IOBE Chairman Takis Athanasopoulos, adding that the target now should be high growth rates.