GDP
Greek politicians are now saying tax increases are off the table. Savings will have to come from cuts. If they want the government workers to be able to find work they will need to reduce taxes to boost the private economy.
i4w predicts no tax decreases in 2012 for Greece
GDP to fall by 3.9% if it is measured using the same method as 2011
Unemployment
Unemployment in Greece is continuing to increase. With not tax cuts expected in 2012 and with continuing staff cuts in the government i4w predicts a unemplyment rate of 25.9% by the end of 2012. Assuming unemployment is measured the same way as in 2011
Government Deficit
It will be cheaper to pay government workers unemployment benefit rather than full pay. Assuming no increases to government workforce and assuming debt haircut.
i4w predicts a government deficit of 6% by the end of 2012. Assuming it is measured the same way as 2011. A marked improvement.
Trade Deficit
Around 10% of GDP in 2011. Businesses closing in Greece will lead to more demand for goods from foreign countries. GDP is expected to fall and reduce spending power.
Generally I expect the trade deficit to massively drop in 2012 due to lower spending power of Greek consumers. Also Greek sending money back to Greece will increase
i4w predicts a Greek trade deficit of 6.8% for 2012
Stock Market
Precipitous declines over the past 2 years.
Falls should stabilise in 2012 or possibly increase towards the end of 2012 as foreign investors buy into the Greek economy prior to any forecast recovery or to simply get in at a low-level with a long-term view.
i4w predicts stabilization in stock values on 2012 or possibly increase towards the end of 2012. Start of 2012 values should decline at a slower rate.
The predictions on a scale of 1-10, 1 being total pessimism and, 10 being total optimism, the predictions are a 6 or 7
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