The Bank of Greece has revised its growth forecast for the Greek economy in 2025, lowering the GDP estimate from 2.5% to 2.3%.
In remarks delivered at a conference organized by the Ideas Circle, the Governor of the Bank of Greece, Giannis Stournaras, explained that this downward adjustment aligns with a broader reassessment of growth projections by the European Central Bank (ECB) for the Eurozone.
Stournaras did not rule out the possibility of the ECB implementing an additional interest rate cut of 0.25% during its Board meeting in April. He reiterated his expectation of two interest rate cuts throughout 2025, projecting a reduction of the main interest rate from the current 2.5% to 2% by year-end.
"The markets are currently anticipating two more interest rate cuts in 2025," he noted, "whereas not long ago they believed the ECB might implement a total of three rate reductions."
Addressing the Greek economy, Stournaras urged the newly appointed Minister of National Economy, Kyriakos Pierrakakis, to uphold the principles of fiscal responsibility that have led to Greece's recent elevation to investment grade by international rating agencies. He opposed any VAT reductions as a means to curb excessive consumption and suggested utilizing available fiscal space to lower taxes and reduce burdens—such as social security contributions—that hinder the competitiveness of the Greek economy.
Stournaras firmly rejected the idea of reinstating the 13th and 14th salaries for public sector employees and pensioners, asserting that fiscal constraints make such measures untenable.
He emphasized the importance of increasing investment to bridge the existing gaps in the Greek economy, highlighting that approximately €50 billion is expected to flow into the country from the European Union over the coming years, courtesy of the Recovery Fund and structural funds.
In discussing the Recovery Fund specifically, he remarked, "We are progressing well in terms of absorption," noting that Greece currently ranks 6th among EU countries in this regard.
