OECD report contrasts IMF’s forecast on the outlook of the Greek economy

The Greek Economic Minister, Mr. Stournaras expressed his disagreement on the OECD forecast for Greece at the OECD conference in Paris. In more details, the OECD report* forecasts a negative 1.2 contraction of the greek GDP for 2014, in a huge contrast with the positive numbers forecasted by various EU bodies and the IMF.

We disagree with this number. The EC, and the IMF also disagree. It is my belief that the number is going to be proved wrong and we will be proved to be right. I believe that our GDP is going to be just below a positive 1.

Fin.Min Stournaras

The economic minister tried to explain that industrial indicators show a stabilisation of the production, and even if they show still a negative outlook, it is far less than the previous quarters. He also referred to the great expectations of Greece from the summer tourist arrivals, saying than tourism indicators show something like 17 million tourist are going to visit Greece this year. This, he said, is going to offer a solid basis for 2014. If all indicators that Mr Stournaras refers to as showing such a progress, why is it that this progress is not reflected in the income of the Greek households? If there is growth, then why there are continuous waves of cuts and reductions of wages and pensions?

If our indicators suggest that pursuing actions directed at improving living standards, broadly defined, have an adverse effect on the economy, perhaps the problem is with our economic measurements.

Stiglitz, Sen, & Fitoussi

*www.oecd.org/greece/44785912.pdf