Economy in Greece difficult but stabilising -EBRD

Economy, Greece, news

Greece’s economic situation remains very difficult but signs of stabilisation are apparent, according to a report released by the European Bank for Reconstruction and Development (EBRD) Wednesday.

The report, put together with the World Bank, said that significant short term uncertainties remain in Greece and that prospects for a quick recovery are weak due to a lack of investment and the need for more austerity to put the country’s debt profile on a sustainable path.

“The fiscal tightening is a headwind to growth in the short term because of the need to aim for primary (budget) surpluses. Downside risks to the forecast could arise from delays in implementing the bailout and completing reviews on time, which would be damaging to confidence,” it said.

For 2016, EBRD expects growth in Greece's gross domestic product to be flat, picking up this year to 2%.

Turning to potential short term growth drivers, EBRD said the economy could get a lift from the disbursement of EU structural funds (up to 7 billion euros), the clearance of public arrears to the private sector, progress in non-performing loan (NPL) resolution, and some on of private sector investment.