The European Commission sent a message to Athens that growth was largely linked to the continuation of the implementation of the necessary reforms, in its winter interim forecast for Greece released on Thursday.

“The recovery of the economy remains largely dependent on the continued implementation of reforms,” the report says a few hours after a high-ranking Eurozone’s source admitted Greece had fallen behind in the reforms linked to its post-bailout requirements.
With regard to the growth forecast in 2019, the Commission made a slight downward revision in relation to its previous forecast in the budget last November. The European Commission projected a 2.3% growth in November in 2019, and today’s report predicts 2.2% growth.

The report points out that the major driver of total demand was the increase in private consumption, which was supported by the increase in employment. Investments remained moderate compared with 2017, at least in part, while in the real estate sector it is noted that investment in housing increased throughout the year.

The Commission also stressed that consumer confidence had almost returned to pre-crisis levels by the end of 2018 and that private consumption is expected to remain the key driver for growth in 2019. However, the report underlines that the rise in exports is expected to slow down, as growth in the tourism sector contracts due to the return of competition from Turkey. In addition, exports of goods are expected to weaken but will remain on a rising path despite the economic slowdown in the EU.