According to the latest Economic Outlook report published by the Organization for Economic Co-operation and Development (OECD) on Tuesday, Greece will not see any growth until 2014. The OECD also predicts that Greece may require further assistance and debt relief to ensure fiscal sustainability.
Contrary to the European Commission’s estimations, the OECD report indicates that Greece will achieve a positive growth rate in 2015. as the international markets recover and the improvement of competition boosts exports and investments.
Nevertheless, the OECD notes that the crippling rate of unemployment will slowly and gradually begin to shrink, while the considerable surplus workforce in conjunction with Greece’s adjustment program will keep prices and wages low. The current account balance is expected to remain positive.
As such, the OECD claims that further fiscal consolidation is needed in order to reduce the Greek debt, which can be achieved via extending repayment deadlines and lowering the interest rate of existing loans. Greece’s economic recovery will be expedited by improving access to credit and encouraging competition.
