The impact of the US tariffs on the Greek economy is expected to be limited, Bank of Greece governor, Yannis Stournaras, estimated.
Speaking to the CEO Club, Stournaras said that Greece has little dependence on the US and the direct impact of the tariffs is therefore expected to be limited.
However, he said that it may be indirectly affected, as an overall slowdown in global trade may reduce demand for Greek products and services and limit growth prospects.
Finally, increased uncertainty in the markets acts as a deterrent to investment, as businesses avoid taking risks in an unstable environment.
At the same time, however, the recent upgrades of the credit ratings of both the Greek State and banks highlight the Greek economy as a positive exception in the current environment of increased volatility internationally.
Regarding the ECB’s next moves, the BoG governor said that “interest rates will probably continue to decrease until they reach 2%. The markets are discounting further reductions, but I believe that we must be cautious due to the very high uncertainty.”
In addition to international and European risks, additional uncertainties regarding the prospects of the Greek economy, according to the BoG governor, are:
- possible delays in the absorption and utilization of the Recovery Fund resources
- the increasing frequency and intensity of natural disasters due to the climate crisis and
- difficulties in the labor market and wage increases.
To effectively address all these challenges, a coherent economic policy strategy is required, with an emphasis on fiscal balance, financial stability, reform consistency and the strengthening of productive investment.
