Domestic lender Alpha Bank on Friday forecast a continued recession in Greece for 2016 of between -0.3 percent and -0.7 percent, while adding, however, that marginal growth rates would return in the second half of the year.
On a brighter note, Alpha Bank forecast a growth rate of 2 percent for 2017.
According to the bank’s weekly economic analysis, the second tranche of prior actions to achieve a first review of the Greek program (third bailout) and the resulting flow of bailout financing will lead to a new economic landscape, one that is nevertheless characterized by two opposing trends.
The “trends” are identified in the bank’s analysis as -- in the first case -- a “recessionary mix” to ensure fiscal adaptation. This negative outlook is linked numerous indirect tax hikes on goods and services, higher income tax brackets and even higher social security contributions that the government has recently passed or will pass via a Parliament vote. As a result, private sector consumption will suffer in 2016.
Conversely, conclusion of the delayed first review by institutional creditors is expected to trigger positive developments, such as a restoration of confidence in the country's economic outlook and an increase in investments, among others.
