Trade with Greece
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This increase is attributed to the fact that Greece
is a safe destination in comparison to Egypt
and Turkey, while Spain, one of Greece’s major
competitors, raised its prices.
Strong rebound
The Bank of Greece, as well as international
organisations, forecast a strong rebound for the
Greek economy, following the feeble growth
recorded in 2016.
More specifically, the anticipated economic recov-
ery is based on the moderate growth of private
consumption as a result of a gradual improve-
ment in wages and corporate profits, and the fur-
ther decrease of the unemployment rate.
This growth is dampened by the contractionary
effect on disposable income of new fiscal meas-
ures of almost 2.6 billion euros, which are sched-
uled for 2017. Investment is also expected to
grow, while the external sector is estimated to
have a moderately negative contribution,
because of the recovery of imports.
A large part of the economic recovery estimate is
attributed, as noted by the Governor of the Bank
of Greece, Yiannis Stournaras, in his annual
report, to the positive effects from the successful
completion of the second review, which is expect-
ed to:
• bring about a decline in borrowing costs for the
real economy;
• restore depositor confidence;
• allow a further easing, or even full lifting, of
capital controls;
• provide a boost to the export sector of the
economy;
• improve the confidence of global markets and
investors in the growth prospects of the Greek
economy;
• allow Greek firms to access international capi-
tal markets; and
• complete the reform effort, geared to restruc-
turing the economy towards a new, extrovert
growth model, and reinforce political and eco-
nomic stability.
Moreover, there are strong expectations that the
reforms implemented since 2010 will leave a sub-
stantial “financial footprint”. Both OECD and Bank
of Greece estimates lead to the conclusion that
reforms have a multiplier effect on the country’s
growth potential. According to the OECD, the
reforms implemented in Greece during 2010-
2016, in conjunction with those about to be imple-
mented as part of the third adjustment pro-
gramme, are expected, holding other factors con-
stant, to lead to real GDP growth of approximate-
ly 13% in the next ten years.
This OECD estimate is corroborated by relevant
analyses by the Bank of Greece, which show that
the most important effect of the reforms concerns
the faster improvement of total factor productivity.
Of course, the Governor of the Bank of Greece
warns that a necessary condition for these effects
to occur is the consistent implementation of all
