ATHENS, April 1 (Xinhua) -- Greece's central bank projects the country's economy to grow by no more than 1.9 percent this year due to over taxation and possible reform backtracking, according to a report published on Monday.
The growth pace expected is considerably lower than the 2.5 percent expansion rate the 2019 budget has provided for. In its latest forecast the European Commission had projected a 2.2 percent growth rate for Greece.
Bank of Greece Governor Yannis Stournaras said in the report that domestic and imported risks contain the growth potential of the gross domestic product in Greece in its first full year after its emergence from the bailout programs last August.
In his report the central banker stresses the need for a wise financial policy and "the continuation of the application of structural reforms until their completion." He particularly points to the declining course of investments last year, the negative ratio of savings on household disposable income, and the persistently high unemployment rate.
In the last quarter of 2018 Greece recorded a 0.1 percent contraction of GDP from the third quarter of the year, according to the Hellenic Statistical Authority (ELSTAT) provisional data. This has resulted in an annual rate of 1.9 percent throughout last year, ELSTAT showed last month.
"The main growth factors in 2019 are private consumption and exports, though they are expected to grow at a slower pace," the report noted.
"Private consumption will be supported by the maintenance of the positive course of tourism, the continuing recovery of the labor market and the improvement of the disposable income of households, while investments will mainly be strengthened by the consolidation of the property market. A negative factor will be the slowdown to the growth rate of the international and European economy," the central bank's report explained.
This year's figures already confirm the economy is unlikely to grow faster than last year. January showed a drop in consumer spending as retail sales turnover slumped 2.9 percent on an annual basis, ELSTAT has also reported.
Greece lost over a quarter of its GDP in the years from 2009 to 2017 due to the financial crisis that forced it to seek three bailouts from the eurozone and the International Monetary Fund.
