IOBE Think-tank Sees 2% Growth for Greece

The Greek economy is set to grow by approximately 2 percent in 2018, according to a quarterly report issued by the Foundation for Economic & Industrial Research (IOBE) on Wednesday.

The Athens-based think-tank reiterated its previous estimates in April that GDP would grow at an annual 2.1 percent pace from 1.4 percent in 2017.

According to the IOBE report, the Greek economy grew by 2.3 percent in the first quarter of the year.

For 2018, the IOBE estimates that there will be an acceleration of growth by around 2 percent while domestic economic activity is set to pick up pace primarily driven by a 7.0 percent increase in export activity.

At the same time, IOBE analysts expect investments in performing sectors such as manufacturing, tourism and transport as well as privatizations to contribute to GDP growth by approximately 13 percent.

The report also points to a further decline in unemployment in the January-March period compared to the same period last year, to 21.2 percent from 23.3 percent with health, agriculture – forestry – fisheries, and wholesale – retail trade creating openings.

The IOBE estimates that prices will retain their upward trend this year, but at a slower pace than last year, almost 0.5 percent.

At the same time, it adds that confidence in the banking system is recovering steadily.

Commenting on the report findings, IOBE President Takis Athanasopoulos said consensus was key to ensuring reforms were in place to cover lost ground.

“Delays, ambiguity and regressions will not only lead to significant delays, as they have so far, but to an immediate and painful increase in the cost of financing for businesses and households and the removal of investors, thus perpetuating the recession, or even stagnation, and unemployment,” he said.

According to Reuters, the EU Commission expects growth by 1.9 percent in 2018 and 2.3 percent in 2019, while IMF places growth at 2 percent this year and 2.4 percent in 2019.