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BoG governor: Greece has made significant progress in correcting past mistakes

Economic adjustment and structural improvements over the past six years have rendered Greece more business-friendly and have opened up significant investment opportunities, in particular for those who will position themselves early in the Greek economy, Bank of Greece governor Yannis Stournaras said on Thursday.

Addressing a EU-Arab World Summit "Partners for Growth and Development:Prospects of the Greek economy after six years of adjustment”, the Greek central banker said, foreign direct investment is also essential for Greece, because it will set in motion a virtuous circle signaling investor confidence in Greece’s future prospects, a definite exit from the crisis and a return to sustainable and extrovert economic growth, 
 Despite delays and missteps, progress in correcting past mistakes was impressive, Stournaras continued. Therefore, a new ESM program, agreed in August 2015, based on the achievements of the first two programs, gives priority to reforms.
He said that a gradual economic recovery was already reflected on a series of key economic indicators, such as industrial production, retail sales, wage employment flows in the private sector and real exports of goods. The Bank of Greece expects the Greek economy to recover in the second half of 2016 and to continue in 2017 and 2018, with the country’s GDP expected to fall 0.3 pct this year, but to rise by 2.5 pct and 3.0 pct in 2017 and 2018, respectively. Nevertheless, risks to the outlook of the Greek economy remain. Delays in the implementation of reforms and privatizations envisaged in the program would dampen economic growth, thereby refueling uncertainty, undermining confidence and weakening the prospects of a definitive exit from the crisis. 
Meanwhile, there also are risks and uncertainties regarding the course of the global economy, stemming, among other things, from protectionist voices and actions around the world, the implementation of a hard Brexit, and a likely exacerbation of the refugee crisis. These risks could slow down the recovery of the Greek economy, both through negative effects on tourism and trade and through a slower-than-expected decline in yields on Greek government bonds due to the risk aversion from global investors.
The containment of the above mentioned risks and the realization of the positive prospects of the Greek economy require a number of tangible and concerted actions, such as accelerating reforms and privatizations, dealing with non-performing loans and agreed on long-term measures to ensure the sustainability of the Greek public debt, Stournaras said.