Greece is expected to maintain high growth rates in investments, after a 9.5 pct annual growth rate in 2017, with the European Commission estimating double-digit growth rates in 2018 and 2019, the economy ministry said in its Economic Development report for the period March-April 2018 released on Monday.
This estimate of high growth rates in investments in 2018 is based on the impact of a forthcoming settlement of state arrears to the private sector, worth 3.5 billion euros, by August 2018. This is expected to boost the country’s GDP by 0.6 pct to 0.9 pct. Another boosting factor is an expected reduction of tax rates or other ways of supporting the real economy, a national growth stategy, a gradual increase in the net investment position of households and enterprises (along with an increase in saving deposits from 119 billion euros in April 2017 to 126 billion in March 2018). The economy ministry said that a gradual increase of funding to non-financial sector enterprises of the private sector, a speedier reduction of non-performing loans, a gradual lifting of capital controls were also expected to support higher investment in the country.
The economy ministry said that pre-crisis investment levels were at 20 pct of GDP, falling to 11.4 pct in 2014 and recovering to 12.5 pct currently and added that progress in implementing structural reforms, funds earmarked by the EIB and EBRD and an improvement in the investment climate in the country were additional boosting factors.
The report said that the problem with the Greek public sector was not its size but its efficiency and stressed that a reform of the public was more than necessary.