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Greece Must Speed Deficit Cutting Efforts, Central Bank Says
February 15, 2011, 4:36 AM EST
By Natalie Weeks
Feb. 15 (Bloomberg) -- Greece must speed up its deficit- reduction efforts and do more to shrink spending on the public sector in order to restore growth to an economy that may shrink more than 3 percent this year, the Bank of Greece said.
Greece’s economy probably contracted slightly more than 4 percent last year and unemployment rose to more than 12.5 percent, the Athens-based bank said in its 2010-2011 Monetary Report. Unemployment will rise further this year, while the inflation rate will fall to 2.2 percent, with core inflation under 1 percent, the report said.
Additional structural measures, to be presented by the government in March, will ensure the general government deficit is cut to less than 2.6 percent of gross domestic product in 2014, the central bank said.
Greek banks face “big and complicated challenges” in 2011 with an expected increase in non-performing loans and credit expansion seen stagnating or declining, the statement said. The central bank reiterated lenders should reduce their reliance on European Central Bank liquidity.
February 15, 2011, 4:36 AM EST
By Natalie Weeks
Feb. 15 (Bloomberg) -- Greece must speed up its deficit- reduction efforts and do more to shrink spending on the public sector in order to restore growth to an economy that may shrink more than 3 percent this year, the Bank of Greece said.
Greece’s economy probably contracted slightly more than 4 percent last year and unemployment rose to more than 12.5 percent, the Athens-based bank said in its 2010-2011 Monetary Report. Unemployment will rise further this year, while the inflation rate will fall to 2.2 percent, with core inflation under 1 percent, the report said.
Additional structural measures, to be presented by the government in March, will ensure the general government deficit is cut to less than 2.6 percent of gross domestic product in 2014, the central bank said.
Greek banks face “big and complicated challenges” in 2011 with an expected increase in non-performing loans and credit expansion seen stagnating or declining, the statement said. The central bank reiterated lenders should reduce their reliance on European Central Bank liquidity.