The Foundation for Economic and Industrial Research (IOVE) has issued a new study on the Greek economy in 2013, according to which the recession will be about 4.2% and unemployment 27.5%. IOVE expects recession to be near zero in 2014, however there are still many uncertainties and unanswered questions regarding this estimation.
In its report, IOVE claims that the stabilization of the Greek economy “will not only indicate that the catastrophic scenario for the economy has gone away, but will be the necessary basis for any improvement from now on”. This stabilization, according to IOVE, is paramount to the improvement of Greek finances.
The report highlights two basic parameters will become clear to Greek society and the economy, that “the increase of consumption must follow the increase of production and the public sector cannot spend more money than it has available”. Adhering to these two parameters will lead to consolidation and recovery.
However, the report warns that should the necessary reforms not be implemented, there is a high risk that the Greek economy will struggle with low growth rates and declining productivity and wages.
