The National Bank of Greece has issued a warning regarding the potential impact of the ongoing war in the Middle East on the country's economic growth. If the conflict persists into April, it is estimated that Greece's growth rate could slow by half a percentage point to 2% for the year. This prediction comes on the heels of data released last week concerning the country's GDP and points to significant external factors affecting the economy.

In assessing the recent developments, the bank's economic analysis department anticipates that continued disruptions in oil transport will cause Brent crude oil prices to hover around $87 per barrel in the first half of the year, before falling to approximately $71 in the latter half. These price dynamics, combined with the effects of the conflict, are projected to increase inflation by 1-1.5 percentage points during the current two-month period, potentially surging to 4% before gradually declining. The average inflation is expected to stabilize at around 3.2% for the year.

As the anticipated GDP growth slows to 1.5% in the second quarter, the overall economic landscape suggests a challenging environment for Greece, which relies heavily on stability in global markets. The implications of sustained conflict in the Middle East not only threaten local growth but could also have reverberating effects across various sectors, marking a key moment for economic policymakers and stakeholders to address potential risks in the coming months.