The Greek economy did not show encouraging signs of recovery. Recent report shows that Greece’s economy shrank 1.2 percent in the fourth quarter of 2016, which is three times more than estimated by economists. This is also the sharpest decline since Greece deemed necessary to close their banks for three weeks back in 2015.
The Greek Prime Minister Alexis Tsipras seems to have an optimistic view however. “For the present year the forecasts show that the Greek economy will show exceptionally high rates of growth after many years of recession, the highest at a euro zone level,” said the Prime Minster to a cabinet meeting.
Yet, as Bloomberg reported, the International Monetary Fund explained last month that frequent and large revisions in Greek GDP data complicate analysis of the economy. In addition, the financial aid that Greece has received doesn’t seem to bear positive outcomes so far, which could become an obstacle for future negotiations between Greece and European Union. As Reuters reported, Greece has lost a quarter of its national output since the onset of the debt crisis that prompted the country of 11 million people to first seek financial aid in 2010. Since then, it has received 240 billion euros from two initial bailouts and is due to get 86 billion under the current third program. But disbursements could be held up if there are more delays in agreeing to further reforms.
The Prime Minister of Greece commented on his government’s plans for the future, saying, “We need an open public discourse on the next day of the country. Primarily, we need to answer the fundamental question of what the production model for the next day should be. Should it be a growth model based on domestic borrowing and private consumption? Is it our desire to return to 2009? Our goal is to converge with developed economies.”