Greece avoided a catastrophic exit from the euro with this week’s bailout deal, but there’s still plenty more pain to come.
Shattered business confidence, a three-week bank shutdown and capital controls have already guaranteed another year of recession in 2015. That means the economy will have contracted for seven of the last eight years.
The European Commission says Greek GDP may shrink by as much as 4% this year, especially since banks have been limiting cash withdrawals during the country’s vital tourist season. Some private forecasters are predicting an even bigger fall. And the economy may not see growth again until 2017.
Greece has begun implementing painful tax rises and spending cuts, which were conditions set by creditors to get a new bunch of bailout loans worth up to $96 billion. And that new bailout will add to the country’s already enormous debt burden.