The Bank of Greece cut its forecast for economic growth to 3.8% this year from 4.8% earlier, and raised its forecast for the inflation rate to 5.2% under the base scenario, in its annual report released on Thursday. The report, presented by Yannis Stournaras, the central banker, also said that under the adverse scenario Greek economic growth will slow to 2.8% and the inflation rate will rise to 7% this year. The central banker said Greece has an historic chance to turn the current crisis into an opportunity and stressed that the main goals of economic policy in 2022 should be preserving the dynamism of economic growth and continuing the efforts to obtain the investment grade. Referring to uncertainties, Stournaras said that in the medium- and long-term, the biggest external risk was climate crisis, and noted that the risk was significant for Greek banks. Stournaras said that, on conditions, the Greek economy could ensure an average annual growth rate of 3%, if certain decisions were taken such as digitalization of justice, dealing with the problem of accumulated private sector debt and accelerating privatizations. He added that it was crucial also to implement these decisions. Stournaras said that the Greek banking system has cut its stock of non-performing loans to 12.8% of total loan portfolio, but remained very high, compared with an EU average of 2.1%. He noted that a 39% of NPLs were currently under special repayment programmes but a high percentage of loans showed delays in repayment. Stournaras urged banks to remain alert and intensify actions to reduce NPLs. Meanwhile, the Greek debt can remain sustainable in the future by maintaining the current momentum for reforms and implementing the Recovery Plan, EU Commissioner for the Economy, Paolo Gentiloni, said on Thursday at the 7th Delphi Economic Forum. The Commissioner added that this will be the basis for ensuring that Greece exits the the enhanced surveillance regime later this year, which is to be decided in June. Gentiloni stressed that the Greek debt is sustainable and that there are several factors that reduce the risk, such as its long repayment period and the low cost of financing, which is supported by the European Central Bank. Asked when the bonds issued by Greece are expected to return to investment grade, he noted that there have been positive developments in recent years. For the immediate future, he said, it was difficult to make predictions as inflation and war created new problems, but overall the path to this very important goal is clear. For their part, Piraeus Bank plans to disburse nearly 27 billion euros in new loans to businesses and households in a four-year period, it said on Wednesday, releasing its strategic plan for 2022-2025. The bank also said it intends to boost net fee income by nearly 140 million euros in the same period, through growth and new strategic initiatives in asset management and real estate management, reduce cost by around 25%, and double its recurring pre provision profitability to 1.2 billion euros in 2025, compared to 0.6 billion euros in 2021. Its plans also include a decrease in NPE ratio from 13% in 2021 to approximately 13% in 2021. In its report, it says "Piraeus will maintain strict cost discipline and further increase efficiency, aiming for a cost-income ratio below 40% by the end of 2025." "Our expectation is to drive efficiencies until 2025 by further reducing expenses at the level of 0.7 billion euros, in order to reinvest in business growth. "Our ambition involves a targeted loan expansion of circa 7 billion euros in 2022-2025, reaching circa 35 billion euros in performing loans at the end of the period, by focusing on priority sectors such as manufacturing, hospitality and energy." It also foresees playing a leading role in asset management, aspiring to a total of nearly 12 billion euros in assets under management in 2025, it said. READ MORE: Greek shipping misses opportunity to capitalise on Maersk’s exit from Russia.