The economy’s medium-run growth potential remains tepid around 1% despite continued progress on reforms through the “Greece 2.0” and Greek Recovery and Resilience plans. Constraints include adverse demographics, as well as weak and uneven productivity growth across the regions because of years of public- and private-sector under-investment and a lack of business-sector dynamism.
Political Stability And Policy Continuity Crucial To Sustaining Investor Confidence
The recent out-performance of the Greek economy gives us confidence that robust economic growth is not transitory, but there are nevertheless several challenges for the outlook. Persistent uncertainty over the inflation outlook raises questions of whether inflation will continue to decline towards the ECB 2% objective. Core inflation sits well above 2% despite recent significant disinflation.
We see…
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