Greece Country Risk Report Q3 2018
With Greece's creditors still to agree on significant debt relief, and with the left-wing Syriza government attempting to reduce the fiscal deficit via tax hikes instead of expenditure cuts, Greece's economy will remain on a very low growth trajectory and will be vulnerable to external market shocks over the coming 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 in improving productivity over the past few years.
Although Greece will aim to run a 3.5% of GDP primary budget surplus in the years ahead, the country will remain dependent on bailout funds and debt relief measures from its creditors if it is to make any dent in its massive debt burden of around 180% of GDP.
The ruling Syriza-led coalition will struggle to build support as disil-lusioned voters move to opposition parties.
Greece will run a historically narrow current account deficit for the next few years, reducing previously systemic risks posed to mac-roeconomic stability from its large external imbalances.
Executive Summary Core Views Key Risks Chapter 1: Economic Outlook SWOT Analysis BMI Economic Risk Index Economic Growth Outlook 2018 To Mark High Point In Recovery GDP By Expenditure Outlook TABLE: GDP GROWTH FORECASTS TABLE: PRIVATE CONSUMPTION FORECASTS TABLE: GOVERNMENT CONSUMPTION FORECASTS TABLE: FIXED INVESTMENT FORECASTS TABLE: NET EXPORTS FORECASTS External Trade And Investment Outlook Signs Point To Narrowing Current Account Deficit Outlook On External Position TABLE: CAPITAL AND FINANCIAL ACCOUNT BALANCE TABLE: CURRENT ACCOUNT BALANCE FORECASTS Monetary Policy ECB Plays Waiting GameFiscal Policy And Public Debt Outlook Debt Relief To Come With Conditions Structural Fiscal Position TABLE: FISCAL AND PUBLIC DEBT FORECASTS Currency Forecast EUR: Near-Term Strength To Give Way Gradually TABLE: BMI EUROZONE CURRENCY FORECAST Chapter 2: 10-Year Forecast The Greek Economy To 2027 Another Lost Decade Ahead TABLE: LONG-TERM MACROECONOMIC FORECASTS Chapter 3: Political Outlook SWOT Analysis BMI Political Risk Index Domestic PoliticsUnpopular Policies To Weigh On Support For Government Chapter 4: Operational Risk Developed StatesTABLE: LABOUR MARKET RISK INDEX TABLE: LOGISTICS RISK INDEXTABLE: CRIME AND SECURITY RISK INDEX TABLE: TRADE AND INVESTMENT RISK INDEX Chapter 5: BMI Global Macro Outlook Key Divergences Emerging In World Economy TABLE: GLOBAL MACROECONOMIC FORECASTS TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y TABLE: GREECE – MACROECONOMIC DATA & FORECASTS