BoG expects Greek economy to grow faster than expected

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The Greek economy will grow faster than the expected average rate of 2% in the next decade because of specific reasons, the Bank of Greece's governor Yannis Stournaras said on Wednesday.

Addressing an EIB's event in Athens, the Greek central banker said the unusually high private sector deposits to 15% of GDP in 2021 from 6% on average in the five years before the pandemic was a contributing factor.

Another was a development which will boost domestic demand and private consumption in particular.

A third reason is that Greece will receive around 30.5 billion euros from the NextGeneration EU fund.

This fund will focus on high added value projects boosting growth in saving energy, green energy transition, digital transformation, employment, social cohesion and private investments.

The use of these funds will boost the country's real GDP by 7% by 2026.

In addition, Greece will receive another 40 billion euros from structural funds in the coming years and it is expected to attract higher foreign direct and indirect investments.

A third reason, he said, was the increased ability of the banking system to fund sustainable investment plans.

Meanwhile, the annual growth rate of total credit extended to the domestic economy stood at 9.9% in January 2022, compared with 10.2% in the previous month.

The annual growth rate of total deposits stood at 8.1%, compared with 8.0% in the previous month and deposits placed by the private sector decreased by 2,232 million euros in January 2022.

This compared with an increase of 4,260 million in the previous month, the Bank of Greece said on Friday.

More specifically, the central bank said that the monthly net flow of total credit was positive by 1,519 million euros in January 2022, compared with a negative net flow of 1,498 million in the previous month.

In January 2022, the monthly net flow of credit to the general government was positive by 2,822 million, compared with a negative net flow of 3,416 million in the previous month; the annual growth rate decreased to 32.7% from 33.4% in the previous month.

The annual growth rate of credit to the private sector decreased to 0.9% from 1.4% in the previous month.

The monthly net flow of credit was negative by 1,304 million, compared with a positive net flow of 1,918 million in the previous month.

In January 2022, the monthly net flow of credit to corporations was negative by 994 million, compared with a positive net flow of 1,931 million in the previous month; the annual growth rate decreased to 3.5%, from 4.5% in the previous month.

In particular, the annual growth rate of credit to non-financial corporations (NFCs) decreased to 2.8% from 3.7% in the previous month; the monthly net flow was negative by 637 million, compared with a positive net flow of 1,511 million in the previous month.

The annual growth rate of credit to insurance corporations and other financial intermediaries decreased to 11.7% from 12.1% in the previous month; the monthly net flow was negative by 357 million, compared with a positive net flow of 420 million in the previous month.

The monthly net flow of credit to individuals and private non-profit institutions was negative by 244 million, compared with a negative net flow of 102 million in the previous month; the annual growth rate remained unchanged at -2.4%.

Τhe monthly net flow of total deposits was negative by 1,962 million, compared with a positive net flow of 3,412 million in December 2021.

In January 2022, deposits placed by the general government increased by 270 million, compared with a decrease of 848 million in the previous month; the annual growth rate stood at -12.0%, compared with -20.9% in the previous month.

Deposits placed by the private sector decreased by 2,232 million, compared with an increase of 4,260 million in the previous month; the annual growth rate decreased to 9.3% from 9.9% in the previous month.

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