Parliamentary Budget Office: Slowing of the economy in the 2nd quarter

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The Parliament’s budget office expresses its concern for the international environment and its impact on the Greek economy.

Reportage: Chrysostomos Tsoufis

“Yes, but” from the Budget Office of the Parliament. In its report on the course of the Greek economy in the first 3 months of the year, on the one hand, the impressive + 7% in GDP in the period January – March is noted, on the other hand, it puts 2 asterisks. The first is the low base of comparison since in the corresponding period last year there was a contraction of GDP by 1.7% as the support measures were in force and the second that the effects of the war that started at the end of February only concern March.

Unemployment may have fallen sharply and the budget picture may be much healthier than last year, but worries about a 1.9% drop in wage costs, a more than doubling of the current account balance and, of course, a jump in inflation.

In this light, the office economists estimate slowing down the growth rate from the 2nd quarter. Its extent will depend on the course of tourism, the degree of activation of the Recovery Fund, the impact of increased energy costs and the rise in lending rates.

The Parliament’s budget office expresses its concern for the international environment and its impact on the Greek economy. Geopolitical instability, rising interest rates and energy costs increase economic uncertainty. The lack of coordination between the Member States and the overall European plan to tackle energy precision certainly burdens the international arena. On the other hand, the extension of the escape clause for 2023 also to some extent frees the hands of the Member States for the formulation of their fiscal policy.

On fiscal policy, the Office notes that, unlike in the pandemic period, there is no room for generalized intervention that would worsen the fragile balance, making the country more vulnerable to external risks. It recommends targeted measures, temporarily financed by additional current revenues so as not to burden the public debt.

Source: skai.gr

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