scholarly journals Short‐term forecasts of euro area GDP growth

2011 ◽  
Vol 14 (1) ◽  
pp. C25-C44 ◽  
Author(s):  
Elena Angelini ◽  
Gonzalo Camba‐Mendez ◽  
Domenico Giannone ◽  
Lucrezia Reichlin ◽  
Gerhard Rünstler
Keyword(s):  
Author(s):  
Elena Angelini ◽  
Gonzalo Camba-Mendez ◽  
Domenico Giannone ◽  
Lucrezia Reichlin ◽  
Gerhard Rünstler
Keyword(s):  

Significance The negotiations with Greece's creditors revealed fundamental disagreements in lenders' views on the sustainability of Greece's debt and failed to address the drivers of future economic growth, once again concentrating almost exclusively on fiscal discipline. In the short term, the deal helps lift economic uncertainty and gains room to manoeuvre. The fact that debt relief measures were put on the table handed a domestic political victory to the ruling Syriza party. Impacts The IMF's drastic reassessment of debt sustainability and downward revision of Greece's growth prospects will deter foreign investors. Additional austerity measures will discourage already weak Greek 'ownership' of the programme, hindering reform progress. Polls suggest Greeks are slowly becoming more sceptical about participation in the euro-area.


Subject The government's latest GDP expectations for 2016-19. Significance On September 19, days before surviving a parliamentary no-confidence vote, the government announced GDP projections for 2016-19, based on improvements in consumption growth and the labour market, where registered unemployment hovers at historically low levels. Despite its weakened position following the recent departure of junior coalition partner Siet, Smer-Social Democracy (SD) is upbeat about the prospects for robust GDP growth in 2016, revising its forecast upwards to 3.6% from 3.2%. Impacts Industrial output, GDP and inflationary pressures may pick up post-2018, as consumers spend more and auto industry investments create jobs. The government may miss its targets in the short term, but fiscal deficits should remain below the EU limit of 3% of GDP in 2016-18. More public-private partnerships, modelled on the Bratislava ring-road, plus EU funding, may support infrastructure investment after 2017.


Sign in / Sign up

Export Citation Format

Share Document