Greek economy ‘still vulnerable to shocks’

3 May 18

Greek’s public finances have “markedly strengthened” but public administration is still facing challenges, the OECD has said.

The Paris-based organisation’s Economic Survey of Greece found that after significant reforms, the country’s recovery from economic depression was gaining traction and growth is projected to strengthen, remaining above 2% in 2018 and 2019.

Its high levels of public debt and bad loans in the banking system also make Greece’s economic outlook highly sensitive to shocks, the OECD noted.

It added that though tax collection has improved, tax avoidance is widespread.

OECD secretary-general Angel Gurría said: “The reforms undertaken by Greece have finally started to bear fruit.

“It is an impressive achievement. With strengthened public finances and a much improved macroeconomic framework, addressing poverty and raising living standards is a priority.”

The OECD said that combatting these challenges will depend on the continuation of the reform efforts of the Greek government.

It “will be essential to reduce vulnerabilities” in the Greek economy, the organisation noted.

Shocks that could affect the country’s financial improvements could come in the form of slower growth among trading partners or a rise in debt service costs.

The OECD suggested the government build on recent reforms to revive investment, continue to fight corruption and enhance public administration to improve the business environment, strengthen the rule of law and increase trust in government.

The organisation said last month that Greece should improve its education system to attain inclusive and sustainable growth.


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