Aslight rise makes room for optimism. Greece’s future is showing a few positive signs. Forecasts have the country’s gross domestic product (GDP) contracting slightly in 2016, less than what had been expected months earlier. This revision comes after the GDP’s decline in 2015 turned out to be less acute than had been foreseen. Nevertheless, the cause of this persistent recession is the fall in internal demand, both public and private.
Although fiscal consolidation required of the country by institutional creditors should keep weighing on family incomes, the drop in public and private consumption should be partly compensated by a positive contribution from the tourist and export sectors.
The economy should turn positive in the second half of 2016 before accelerating in 2017 with an expected increase in internal demand supported by structural funds from the European Union and liquidity released from the negotiated cancellation of part of the public debt.
Even unemployment started to fall in 2015, raising expectations that it will keep falling despite the rise in salaries, highlighting the positive effect of labor market reforms made in recent years that led to a rise in the employment rate and, as a consequence, a gradual recovery of the economy.
Greece: Small Steps towards Growth
As for the public works sector, Greece still ranks 24 among the EU’s 28 member states in terms of quality of its infrastructure, far from the standards of northwestern Europe. And the gap does not seem to be narrowing with the passing of the years. The number of infrastructure works at an advanced stage but not yet delivered rose notably during the crisis with a comprehensive value estimated at €20.7 billion by 2022. The amount of public financing available for infrastructure projects in 2016 is equal to that of 2002, while investments in public works has fallen cumulatively by €50 billion in the same period due to the deep recession and the resulting effect on the budget. Some works are still on their way to being completed, however.
Out of a total of 78 projects expected to be completed in the next six years, 39 relate to highways, ports and airports; 15 to the energy sector; 12 to railways; and 12 water and waste management. In this context the Stavros Niarchos Foundation Cultural Center represents is a case apart, since it was financed privately. But its success and the impact it will have on the environment offers a positive sign for the entire sector.
All photos of the “The New Cultural Center in Athens” Special Issue are copyrighted: Copyright © Moreno Maggi by Salini-Impregilo