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Greece Country Risk Report Q4 2018

Greece Country Risk Report Q4 2018

Key View:

With Greece's creditors still to agree on significant debt relief, a banking sector still struggling with non-performing loans (NPLs) and a government tied to primary budget surplus targets, Greece's growth outlook is subdued.

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.

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 disillusioned 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 macroeconomic stability from its large external imbalances.

Key Risks

With parliamentary elections scheduled for October 2019, the next Greek government could seek to challenge the reforms and fiscal targets agreed on with Greece's creditors.

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. However, the possibility of a 'Grexit' remains low, with little appetite from Greece or the EU for such a scenario.


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Greece Post-Bailout: No Sign Of A Strong Economic Rebound
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
To Pose Limited External Financing Risks
Outlook On External Position
TABLE: CAPITAL AND FINANCIAL ACCOUNT BALANCE
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
Monetary Policy
Eurozone Inflation Will Struggle To Stay At 2.0% ECB Target
Fiscal Policy And Public Debt Outlook
Greece Post-Bailout: Budget Restrictions Raise Role Of State Question
Structural Fiscal Position
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
Greece Country Risk Q4 2018ContentsCurrency Forecast
EUR: Gradual Appreciation Amid End Of QE
TABLE: EUROZONE CURRENCY FORECAST
10-Year Forecast
The Greek Economy To 2027
Another Lost Decade Ahead
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Greece Post-Bailout: Economy Poses Greatest Risk To Political Future
Global Macro Outlook
Strong Growth, But Greater Headwinds Too
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES, REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS, REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: GREECE – MACROECONOMIC DATA & FORECASTS

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