Prospect of political instability, polarization threatens Greek economy: Parliamentary report

By Ahmet Gencturk

ANKARA (AA) - A report by the Greek Parliament’s Budget Office said the prospect of political instability and polarization in politics threatens the country’s economy, local media said Tuesday.

Uncertainties about the formation of a stable government after elections in 2023 and the sharpening of political polarization are major risks, the report pointed out, according to public broadcaster ERT.

It also highlighted that in the third quarter of this year, the growth rate remained limited at only 2.8% compared to 7.8% for the second quarter and 7.1% for the first quarter.

The report added that the Greek economy is entering a “soft landing” phase during which a significant slowdown is most likely because of the negative effect of inflation on real disposable income and consumption, a decline in economic activity to major trading partners, the rise in lending rates and the expected end of most fiscal support measures by the government.

In addition, the report claimed, the economy could soon face twin deficits -- a fiscal deficit and current account deficit.

“Attention is therefore needed in the external sector of the economy in order not to develop into a serious macroeconomic imbalance,” it added.