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EC Report: Greek Economy to Grow 0.9% in 2014, 2.9% in 2015

European commissionThe Greek economy is expected to grow by 0.9% this year and by 2.9% in 2015, the European Commission said on Monday.
In its spring estimates for the country’s economic outlook, the Commission reiterated its estimates released February 25, which expected the wider eurozone economy to grow by 1.2% this year and by 1.7% in 2015 (down from an 1.8% estimate in February).
For the EU, it expects a 1.6% growth rate in 2014 (1.5% in February) and a 2% growth rate in 2015 (unchanged from February).
The unemployment rate is projected to fall to 26% in 2014, from 27.3% in 2013 (up from a 25.7% estimate in February) and to 24 pct of the workforce in 2015 (down from 24.% in February).
The fiscal deficit is estimated to fall from 12.7% of GDP in 2013 to 1.6% in 2014 (down from a 2.1% estimate in February) and to 1% in 2015 (unchanged from February).
Public debt is expected to rise to 177.2% of GDP this year but to fall to 172.4% in 2015 (up from an 171.1% estimate in February).
The inflation rate is expected to remain negative at -0.8% this year from -0.9% in 2013, rising to 0.3% in 2015.
Finally, investments are expected to rise from 3.6% in 2013 to 12% in 2014 and 6.5% in 2015.
“Recovery signs are strengthening” was the headline of the chapter for Greece in the European Commission’s spring economic forecasts report. The Commission noted that structural reforms made in product and services markets led to an improvement in competitiveness, which in turn will boost exports and investments.
The Commission noted that confidence indexes have improved in the construction sector and among consumers, while industrial production grew in the first two months of 2014, retail sales stabilized along with building licenses. Greek exports are projected to grow further helped by a recovery in the eurozone, while imports are expected to decline at a slower pace this year.
The European Commission noted that investments and private consumption were expected to contribute largely in a 2.9% growth rate expected for 2015. Although some reports claim Greek unemployment is still rising, the EC report said the unemployment rate reached its peak at 27.3% in 2013, while reforms made in the labour market and higher investments will contributed to increased employment from this year.
The report noted that risks are balanced and related to general geopolitical developments in the region, while it stressed that any slowdown in implementing structural reforms could negatively affect confidence in the economy.
The Commission welcomed the Greek government’s initiatives to rationalize spending, to have a more efficient social insurance system and to boost tax collection.
(source: ana-mpa)

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