Analysts say Greek economy is recovering, but reform effort must continue

Reports by two Greek banks released Thursday urged the Greek government to keep implementing reforms as the economy gears up for a return to growth in the second half of 2014.

Greece’s budget primary surplus widened to 2.28 billion euro in the first seven months of this year, compared to 707 million euro posted in the first half of the year, according to data released by the finance ministry on Thursday.

The numbers released show that the primary surplus target was exceeded by 1.48 billion euro. The collection of higher-than-expected state revenues combined with the containment of expenses had a positive impact and resulted in the January-July target figure being exceeded.

Reports by Eurobank and Alpha Bank point out however, that if Greece is to truly complete a total economic comeback, reforms must continue at a faster pace and the government should eliminate mistakes and withdraw policies hindering growth.

The Greek economic recovery and higher employment growth are hindered by property tax distortions, which contribute to a further decline in real estate market activity, Alpha Bank’s analysts report. “What is even worse is that they keep unemployment at high levels,” the report adds.

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