Eurobank: “Second half of 2016 will be ‘critical’ for Greek economy”

To Vima — The second half of 2016 will be critical for the Greek economy, argue Eurobank analysts in their weekly update on latest developments, underling that the return to growth is imperative, in order to avoid the pitfalls of stagnancy.

According to the bank report, the real GDP for the first half of the year is expected to shrink due to the drop in consumer consumption and exports. A lot will depend on the expectation of businesses and household regarding the economy, the further improvement of domestic financial conditions, the progress of negotiations for the second bailout review, as well international economic and political developments.

Eurobank’s analysts are concerned, because there has been a negative growth rate in Greece over the past three semesters, with the real GDP shrinking by 1.7% on an annual basis. The report notes that a series of macroeconomic and microeconomic variables suggests that the Greek economy may continue to be recessive in the second half of 2016.

These variables include the volume index in retail trade which declined in May 2016, the 7.29% drop in exports during the second trimester of 2016, the rate of unemployment which despite a minor improvement remains high, the deterioration of the economic climate and drop in manufacturing.