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Greece in Recession: Economic predictions, mispredictions and policy implications

Petralias, A., Petros, S. and Prodromidis, P., (2013), “Greece in Recession: Economic predictions, mispredictions and policy implications”, Hellenic Observatory Papers on Greece and Southeast Europe, GreeSE Paper No.75, September.

We look into the available macroeconomic figures and the predictions made about the recession in Greece by international organizations, Greek research centers, and the Greek government; and suggest that the predictions regarding the decline in real GDP in recent years were overly optimistic. The same entities predict that real GDP will fall by 4.2-4.6% during 2013. However, by our calculations, the drop may be steeper than the one predicted, even if some of the assumptions made by these institutes or the government materialize. We hope the steps taken will disprove the accuracy of our prediction. To that end we provide some policy recommendations.