BoG monetary report: Greece will miss fiscal, growth targets for 2019

2 July 2019
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The Bank of Greece (BoG) on Monday again sent “shock waves” through the outgoing Tsipras government’s economic policy and ministers’ frayed nerves, this time warning that a recent and abrupt batch of welfare spending and tax relief – coming just before European and local government elections and even in their wake – is costly and endangers this year’s fiscal targets.

The forecast, included in the BoG’s Monetary Policy Report for 2018-2019, comes less than a week before a snap election is held Sunday, which based on the latest results from all mainstream opinion polls, has Alexis Tsipras and his hard left SYRIZA losing to center-right and pro-market New Democracy (ND) party.

In an apparent “parting shot” at the once virulently populist government, the BoG also maintains that slow growth rates continue to plague Greece’s economic recovery.

The BoG, led by former finance minister Yannis Stournaras, has been a nagging “thorn” in the side of Tsipras’ government since the latter assumed power in January 2015 on a tide of public discontent with bailout-related austerity policy.

On Monday, the BoG report again forecast that Greece’s primary budget surplus for 2019 will fall short of the creditor-mandated 3.5 percent of GDP, hovering instead at around 2.9 percent.

In terms of GDP growth, the BoG forecasts 1.9 percent this year; 2.1 percent in 2020 and 2.2 percent in 2021.

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