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BoG governor: Greece needs steep increase in private investments

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Private investments must increase by 50% in the near future if Greeces production potential is to improve, Bank of Greece (BoG) governor Yannis Stournaras said during an event at the Foundation for Economic & Industrial Research (IOBE) on Monday.

Stournaras said reforms and privatisations must continue, and investors must be reassured that fiscal and reform policy will not head in the wrong direction. 

Gross capital investments in the private sector shrank in the last decade from 22% of the GDP (2007) to 8% of the GDP (2017), dropping to negative numbers if depreciations are excluded. Net capital investments in businesses amounted to about -4.3 billion euros, or -2.4% of the nominal GDP.
On the other hand, improved economic conditions facilitated funding for businesses, with bond issues in 2017 amounting to 1.1 billion euros (compared to 6.3 billion euros for 2012-2014).

The BoG governor said that the situation had improved in terms of non-performing loans (NPLs), and banks capital liquidity indexes in particular had risen to satisfactory levels, surpassing the European average. Efforts to decrease the number of NPLs appear to be bearing fruit, he said, with banks NPL exposure dropping by around 11 billion euros in 2017.  He warned however that the accumulated balance is still high, at nearly 95 billion euros at end-2017.
 
Source: ANA-MPA

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