Greece managed in 2023 to improve a number of long-standing weaknesses in its economy, as public debt, the stock of non-performing loans and unemployment fell in the previous year, but further adjustment and close monitoring is required, notes a report by the European Commission on our country.
THE debt to GDP ratio continued to decline, remaining the highest in the EU, with risks to debt sustainability in the near term remaining low. The expected further improvement in fiscal balances is expected to ensure that public debt continues to decline.
For current account deficit the report notes that this increased significantly in the three-year period 2020-2022 and decreased by a third in 2023, mainly due to favorable developments in imports and exports, but remains significantly higher than pre-crisis levels.
THE net investment position of our country also improved in 2023, although it remains the lowest in the European Union. Real consumption slowed last year, although the consumption-to-GDP ratio returned to pre-pandemic levels and remains the highest in the EU. The expected significant increase in investment is likely to keep demand for imports high during the plan period. Recovery and Resilience,
The report also notes that the stock of “red” loans continued to decline, however there was no significant progress in reducing the servicer portfolio that continues to weigh on private sector balance sheets and creditworthiness.
Reforms of the Recovery Fund are critical
“The maintenance of the prudent fiscal policy and the timely implementation of the reforms of the Recovery and Resilience Plan remain critical factors for ensuring the structural restructuring of the Greek economy”, it is also noted in the conclusions of the report.
Maintaining the reform momentum in areas such as the functioning of the public sector, the implementation of justice and bad loans are seen as critical going forward, while securing the target of primary surpluses above 2% is equally critical.
“Furthermore, narrowing the investment gap depends on improving the business climate and access to finance, as well as strengthening the financial sector and capital markets,” the report added.
