Citigroup forecasts for Greek economy the most pessimistic yet

29 July 2016
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Citigroup continues to be utterly “bearish” on Greece’s economic prospects, disregarding other institutional predictions of GDP growth in 2017 and revisiting the specter of “Grexit”.

Citigroup has previously predicted that Greece will eventually leave the common euro currency, a forecast that came even as the group operated a several dozen bank branches in the country. The Citi bank subsidiary subsequently sold its banking operations in Greece to local lender Alpha Bank.

In its recently unveiled Global Economic Outlook and Strategy, Citigroup predicts that the recession in 2016 will translate into a decrease of 1.2 percent of GDP, and not the -0.5-percent estimated by the Greek government. It bases its more pessimistic outlook on the fact that consumption and other service sectors remain stagnant, with no signs of recovery.

Citigroup’s report states that a reversal of this trend is not visible, instead deterioration is predicted, with the forecast for 2017 being a eyebrow-raising -3.1-percent slump in GDP.

Citigroup’s prediction is diametrically different than the ones publicized by Greece’s institutional lenders, especially European institutions, the Greek government and the Bank of Greece. The latter mostly predict GDP growth in 2017 above 2 to 2.5 percent.

Even more ominously, Citigroup predicts a 7.1-percent recession in Greece for 2018.

The uniquely pessimistic forecast by the NYC-based global credit institution also assesses that the deflation-inflation index in the country will skyrocket from 1.1 percent in 2015 to 10.1 percent in 2017 and 46 percent in 2018.

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