OECD: Exports, Investments and Competitiveness to Support Greek Economic Growth
Thursday, 27 November 2014
Exports, investments and competitiveness will support economic growth in Greece in the next two years, the Organization for Economic Cooperation and Development (OECD) said on Tuesday.
In a report released here, the Paris-based organization, said that "after six years of deep recession in Greece, growth is expected to be positive in 2014 and to gain more dynamism in the 2015-2016 period. Recovery should be led by a dynamic development of exports, strengthened by investment activity and supported by improving competitiveness".
The OECD noted that economic activity grew in 2014 thanks to a significant increase in tourism, improving confidence and a stabilization of domestic demand. The unemployment rate, although remaining at high levels in 2014, around 26 pct, is down from historic highs and it is expected to gradually fall to around 24 pct in 2016. The organization expects prices and wages to continue falling in the next two years, although at a slower pace, while the consumer price index will remain negative. Labor cost per unit will continue falling, but competitiveness improves supporting exports, the report said, adding that the country's public debt will surpass 175 pct of GDP in 2014. "The public debt's big burden is a challenge for Greece," OECD said, adding that an additional restructuring, such as extending maturity and lowering interest rates, could be needed. "Debt reduction could take years of stable growth and a strong fiscal situation. The debt's big burden makes it necessary to have a fiscal discipline although automatic stabilizers were expected to help in balancing the situation," the report noted.