Greeks Confidence in Economy Rises

A gradual return of confidence in the Greek economy following the completion of the second review is becoming increasingly apparent, according to a report by Alpha Bank economic analysts on Saturday.

The returning confidence was reflected in the improvement of key indices, such as the economic sentiment indicator, and a steady increase in household and business deposits in Greek banks, AMNA reported.

The report also pointed to a lower reliance by Greek financial institutions on the European Emergency Liquidity Assistance system, lower yields for Greek state bonds and upgrades of the economy by credit rating agencies.

The above, combined with improved liquidity conditions as a result of a gradual payment of public sector arrears to the private sector, as well as the strong performance in tourism could help significantly boost domestic economic activity, the analysts predicted.

They warned that attracting major foreign direct investments will require a rapid completion of the third review to further strengthen the momentum, as well as speeding up structural changes and privatizations to make the country a secure investment destination offering major opportunities.

Of key importance for such an environment, the report said, will be the start of talks to make specific the measures that will be adopted to relieve Greek debt after the third program review.

Official figures record the Greek economy’s recovery continued in the second quarter of the year, with a second straight period of growth, according to AP.

Provisional data Friday from the Hellenic Statistical Authority indicate show that the Greek economy, battered by years of crisis, expanded by a quarterly rate of 0.5% in the April to June quarter. That means that on a year-on-year basis, the Greek economy grew by 0.8%.

Greece has been struggling through a financial crisis since 2010, and has been dependent on billions of euros in rescue loans from three international bailouts.

Its economy has shrunk by around 25% over the past decade or so, a recession that’s seen unemployment and poverty rates swell across the country.

Meanwhile, the unemployment rate in Greece eased to 21.7% in May from 21.8% in April, Eurostat said in a report released on Thursday.

In the eurozone, the unemployment remained stable to 9.1% and in the EU to 7.7%.