Bank of Greece (BoG) Gov. Yannis Stournaras predicted a 1-percent primary budget surplus for 2016, something that if proved accurate, means that an automatic spending cut mechanism will not be activated.
Speaking before a relevant Parliament committee on Monday, Stournaras, the former finance minister, also proposed a “trade off” between “less austerity with higher growth.”
“We'll exceed the goal of a 0.5-percent primary budget surplus, compared to GDP, and may even reach double the figure, linked of course with the conclusion of the second review,” he said, in referring to the BoG’s report on Greece’s monetary policy for 2015-2016.
The influential Greek central banker also categorically disagreed with criticism, aired mostly by certain local banking executives, over recent SSM-mandated changes in the boards of Greece’s four systemic banks.
In continuing his presentation, Stournaras also forecast that 2016 will see the recession continuing in Greece, with a 0.3-loss of GDP, although he predicted that 2017 will record a 2-percent GDP rise in H2. The latter, he said, will offset negative performances for Q1 and Q2 2017.
He also forecast that consumption will rebound in 2017 and 2018, “despite the increases in taxes, as employment will also rise”.
