With the acceleration of the economic recovery and the improvement of all economic indicators in the 11 months of 2018 on an annual basis, it is clear that the starting momentum of 2019 is positive, as recorded in the Economic Development Bulletin of the Greek Ministry of Economy and Development.
As it seems, for the time being, the continuing expansion of global activity is expected to continue to support Greek exports. However, there are risks associated with the severe slowdown in growth in Europe (from 2.7% in the first quarter of 2017 to 1.7% in the third quarter of 2018), the vertical decline in the EU of the PMI index (the most important for an estimate of future growth according to the ECB) and the rise of trade protectionism worldwide, which could pose a serious threat to Greek exports and therefore their leading role in the development process.
Redistribution in favor of the economically weak
Within this framework, it is not an exaggeration to claim that the Greek economy is now growing in an increasingly fluid international environment, and to this end it has to boost domestic demand (investments and consumption) to offset the potential international adversities of 2019. In this respect, the strengthening of the business environment with specific structural changes that would facilitate investments, as well as stimulating consumer spending through the replacement of income in favor of the weaker groups of the population, serve to adaptation and continuation of the developmental policy at the current juncture.
Reinforcement of the available revenues in 2019
In particular, the decision to extend collective agreements (to bank employees, travel and tourism agencies, shipping agencies and companies, hotels, etc.), the abolition of the sub-minimum wage and the increase in the minimum wage, cancellation of the pension cuts, the distribution of the social dividend and a range of other measures to help those with weaker incomes (reduction of insurance contributions, etc.) are expected to boost disposable income and stimulate consumer demand in 2019.
At the same time, following the major changes (under the third program 2015-2018) in the social security and retirement system, product markets, energy, public sector efficiency (including a centralized procurement system and human resource management reform) transparency (political party funding), etc., there are “serious structural reforms in the business institutional framework and environment, the results of which are expected to are clearly visible”, according to the Greek Ministry of Economy./IBNA