The Greek economy will continue to recede in 2016, with GDP forecast to fall by 1 percent, the Athens-based Foundation for Economic & Industrial Research (IOBE) said on Wednesday, in unveiling its quarterly report on the course of the domestic economy.
IOBE said projected new tax measures will negatively affect consumption and employment in the retail and the restaurant-bar-cafe sectors. The study said an expected increase in tourism will not overturn the negative forecast.
Unemployment in recession-battered Greece is expected to reach 25.2 percent in 2016, up from 24.4 percent in the Q4 2015.
Additionally, less disposable income – also as a result of pending direct and indirect tax hikes – is expected to boost a deflationary trend, while an expected increase in VAT rates will dampen consumer spending, IOBE estimated. Zero inflation to a slight drop in prices is expected this year, the report noted.
