The Bank of Greece (BoG) on Friday revised its figure for Greek economic growth in 2017, now predicting a 1.6 percent GDP increase.
The forecast was including in the BoG’s report for monetary policy in 2016-2017.
The previous forecast by Greece’s central bank was a more robust 2.5 percent, in line with last year’s forecasts by European creditors and the EU Commission, which had even pointed to a 2.9-percent GDP hike for 2017 in the crisis-battered country.
According to central bank, the weaker growth dynamics can be attributed to the long delay in completing the second review and to the consequent surge in uncertainty, which led to a considerable decline in investment.
The bank said the economy still faces three major legacy problems, namely high unemployment, a high stock of non-performing loans and a high public debt-to-GDP ratio.
Nevertheless, the delay in finally concluding the second review of the Greek program – achieved after more than year of delay on June 15 – and resurgent uncertainty in the country, led to a “significant” decrease in prospective investments, according to the BoG report.
Conversely, the BoG said medium-term prospects remain positive, as long as the implementation of memorandum-mandated reforms continues unhindered – another standing phrase repeated by practically every high-ranking official associated with the Greek adjustment program.
Positive economic and political developments in the EU as a whole also benefit Greece’s recovery, the BoG stated.