Greek economy seen expanding by 2.5-3.0% in 2022-IOBE think tank

ATHENS (Reuters) -Greece’s economy is seen growing by 2.5-3.0% this year if the war in Ukraine does not end before the summer, influential think tank IOBE said on Tuesday, lowering its previous 4.5%-5.0% growth forecast made in January.

“We have a war in Europe which affects everyone,” IOBE head Nikos Vettas told a media briefing.

Under an alternative, more optimistic, scenario in which the war in Ukraine ends in spring and energy costs decline, reducing inflation, the economy could grow between 3.5-4.0%, he added.

Vettas said IOBE sees a generally positive economic outlook but a slowdown compared with previous months.

Before the war, IOBE expected Greece would have a window of opportunity in the coming 3-4 years to make reforms and see its economy growing by 4-5% growth, IOBE said, but the Ukraine conflict will impede that effort.

Tourism, the Greek economy’s main driver, will help boost growth though a question mark hovers over the amount of profit businesses will actually make due to inflation and higher energy costs, he said.

“If the crisis in Ukraine continues and sanctions…are extended for many months, then Europe will be led to a recession and our economy will not escape,” he said when asked about the IOBE’s projections for 2023.

(Reporting by Lefteris Papadimas and Renee Maltezou, editing by Mark Heinrich)