Angel Guria, the head of the Organisation of Economic Co-Operation and Development (OECD), will present the outline of the “Economic Survey for Greece 2017” in Athens today, following talks with PM Alexis Tsipras and Finance Minister Euclid Tsakalotos.
The OECD projections for the Greek economy are positive.
“GDP growth is projected to rise to 2.3% in 2018, and then moderate to 2% in 2019. Private consumption and investment will lead the recovery, responding to reduced policy uncertainty and gradually improving financial conditions. Exports should continue to increase, supported by rising external demand. Accelerating imports will subtract from growth in 2019. Excess capacity is diminishing but remains exceptionally large, limiting price and wage pressures,” the survey summary notes.
The report notes the huge social impact of the economic crisis and proposes a more effective re-orientation of social policy.
“Reducing high levels of poverty, especially among young people, remains urgent. The guaranteed minimum income programme is a welcome first step but social protection overall needs to be refocused. The recent spending review has identified fiscal space for a moderate expansion of targeted social programmes. Continued product market reforms would further improve competitiveness,” it states.
The problems faced by the banking sector and debt restructuring are also key focuses of the report: “Greece’s high public debt and banks’ large stock of non-performing loans (NPLs) are sources of financial vulnerabilities. Putting public debt on a stable downward path will require sustained reforms to boost potential output and additional debt restructuring. Banks’ large stock of NPLs adds to risks and limits banks’ lending. Gradually curing and disposing of NPLs while ensuring banks retain sufficient capital buffers is a priority.”