Greece's creditors have delayed offering Greece any substantial concessions on bailout conditions, due to domestic political concerns.
Without offering significant debt relief, Greece's creditors have ensured that Greece's economy will remain in the doldrums and that the country will need further bailouts by the time its current deal expires in 2018.
Partially as a result of this, we expect Greece's economy to remain stuck in the doldrums over the next few years.
This view is underpinned by severe structural issues facing the country, namely an unsustainable government debt load, a dire demographic profile, and Greece's scant progress improving productivity over the past few years.
Inflationary pressures will gradually build up in Greece towards end-2016, amidst rising energy prices and a gradual improvement in domestic economic conditions.
Greece will run current account surpluses for the next few years, reducing previously systemic risks posed to macroeconomic stability from its large external imbalances.
We do not rule out another debt crisis re-emerging in Greece in the next few years, before Greece completes its bailout in 2018.
Several more difficult years economically and declining support in the polls may prompt to the ruling Syriza party to try and rip up the terms of the bailout once again, in a last ditch attempt to retain popular support and improve the country's economic outlook.
Such an outcome would undoubtedly lead to growing fears of a potential 'Grexit', which would be net negative for Greece from a financial and political stability perspective.
|f = BMI forecasts. Source: National Sources/BMI|
|Nominal GDP, EURbn||177.6||176.0||179.3||184.0|
|Real GDP growth, % y-o-y||0.7||-0.2||0.2||1.6|
|Consumer price inflation, % y-o-y, eop||-2.6||0.4||1.0||1.3|
|Exchange rate EUR/USD, eop||0.82||0.92||0.91||0.87|
|Budget balance, % of GDP||-3.7||-7.3||-3.6||-2.6|
|Current account balance, % of GDP||-2.1||-0.1||1.1||0.9|
Assess your risk exposure in Greece with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Greece with confidence.
Your subscription service includes:
- Delivery of the report in print and PDF
- Online access for 12 months
- The functionality to translate your online report into your choice of 10 languages - Arabic, Chinese, French, German, Italian, Japanese, Korean, Portuguese, Russian and Spanish
- The ability to export data and graphs from the online report directly into your workflow
- The support of a dedicated Account Manager to answer any questions you might have about your subscription
- Access to our team of leading analysts who will be happy to answer any questions you might have about the data and forecasts included in this report