Eight years after the start of the severe debt crisis which brought Greece at the brink of default, optimism edges up for the economy, as financial indexes improve.
However, challenges remain and Greeks must stay committed to fiscal discipline and the reform path after the end of the third bailout this summer to ensure sustainable growth, Greek scholars told Xinhua, echoing recent remarks by the Greek government, international creditors and foreign analysts.
The year 2018 will be one “filled with challenges and important opportunities that Greece should not miss,” Greek Prime Minister Alexis Tsipras said during a cabinet meeting early January.
After eight years of tough austerity and reforms under bailout programs Greek economy is set to be freed from strict supervision and fully return to capital markets.
As European officials also voiced optimism of better days ahead, credit ratings agencies such as Standard & Poor’s which announced the upgrade of Greece’s credit rating a week ago, acknowledged that the economy is on a path to recovery.
Greece ran primary fiscal surpluses over the past two years and exited recession and the positive outlook on Greece reflects the potential for further improvement from the policy and financing environment over the next months, according to the agency’s experts.
“The prospects of the Greek economy over the next months are overall good for several reasons. First of all economy starts from a low base, then there are some reforms that have been having a positive impact, but primarily there is political stability,” Nikos Vettas, professor of economics at the Athens University of Economics and Business and director of the Athens-based Foundation for Economic and Industrial Research think tank told Xinhua.
“Now over the longer run it becomes an open question to what extent the prospects of the economy will remain strong, because that depends on the level and quality of investments done in the country,” he noted.
During the adjustment program, there have been some significant successes, but also failures, the professor explained. Greece has fixed its “twin deficit” which basically means it doesn’t produce fiscally any deficit, imports and exports have been balanced and there have been significant reforms in modernizing parts of the public administration for instance on the tax collection.
The Greek economy is forecast to grow by 2.1% in 2018 after a growth rate of 1.5% in 2017, boosted by strong exports growth, according to IOBE’s quarterly report.
