Greek economy predicted to slump 5% this year

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Greek economy predicted to slump 5% this year

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There is more pressure on Greece’s government as the country’s ‘s most influential think tank — the Foundation for Economic and Industrial Research — now believes the economy will contract by five percent this year.

That is more pessimistic than the country’s international lenders and would make it more difficult for Athens to meet its fiscal targets.

The latest figures show a sharp fall in production and new orders in March which helped push up unemployment.

IOBE’s outlook on growth is more bleak than projections by the EU Commission and the IMF which see the Greek economy contracting 4.7 and 4.8 percent respectively.

Taking a critical view on the policy mix pursued so far, the think tank feels the government had cut investment spending too sharply. It also said steps to boost competition in markets were inadequate and the pace of privatisations proved too slow.