ATHENS, July 1 (Xinhua) -- The government to emerge from the July 7 general election in Greece will have to handle an underperforming economy and execute a budget that is set to miss its primary surplus target, warned the Bank of Greece in its regular monetary policy report issued on Monday.
The central bank's projection on the Greek economic growth in 2019 stands at 1.9 percent, the same as in the previous report, against a revised government target for 2.3 percent, according to the medium-term fiscal plan forwarded to the European Commission in spring.
Last Friday, the state-funded and government-appointed Center of Planning and Economic Research (KEPE) undercut further the government estimate for this year's growth, putting it at 1.76 percent.
The Bank of Greece also warned in its report that the government handouts implemented as of mid-May will mean the primary budget surplus target of 3.5 percent of the gross domestic product will not be met, reaching just 2.9 percent of GDP instead.
The report, signed by Governor Yannis Stournaras, a former finance minister, further identified delays in the management of local banks' nonperforming loans that add up to some 80 billion euros (91.2 billion U.S. dollars), government backtracking in the implementation of reforms, and a series of challenges on the basis of domestic and foreign risks.
The central bank particularly highlighted the need for an increase in investment and the preservation of the recently formed positive market climate that has seen Greek securities advance.
"Market reaction in the last few weeks, with the major decline of the Greek bond yields, is a good omen for the future, as long as the expectations generated are confirmed through timely actions on economic policy concerning the investment climate," the report noted. (1 euro = 1.14 U.S. dollars)
