The direct impact on the Greek economy of higher US tariffs will be limited, Bank of Greece (BoG) Governor Yannis Stournaras said on Tuesday.

Speaking at a CEO Club event, Stournaras also preannounced the European Central Bank's intention to further reduce the interest rate to 2%. 

The BoG governor explained that Greece has very low trade dependency on the United States, and is therefore expected to experience limited direct impact on the raise in US tariffs. However, he added, it may be affected indirectly in that a global trade slowdown may reduce demand for Greek products and services and limit the Greek economy's development prospects. In addition, increased uncertainty in markets will act as a deterrent to investments. On the other hand, the recent credit agencies' upgrades of the Greek state and banks show up the Greek economy as a positive exception in the current global environment of increased volatility, he noted.

Besides global and European threats, Stournaras pointed out additional uncertainties among the factors affecting the Greek economy's prospects: possible delays in absorption and use of Recover Fund resources; increased frequency and intensity of natural catastrophes due to climate crisis; and increasingly tight labor market along with higher wage raises.

The central banker's advice for the above included a cohesive strategy of economic policy emphasizing fiscal balance, financial stability, reform consistency, and boosting of productivity investments. The acceleration of the absorption and effective utilization of Recover Fund resources is critical, Stournaras said, to reduce the investment gap, strenghten the potential product and structural competitiveness and overall improve the economy's resilience.