High inflation and interest rates, with the latter easing at a slower rate, is the forecast from National Bank of Greece (NBG) chairman Gikas Hardouvelis, who is also the new president of the Hellenic Banks Association (HBA).

Speaking at the annual Hellenic Finance and Accounting Association conference this month in Athens, Hardouvelis, a former Greek finance minister, nonetheless declared the biggest problem facing Greece to be population decline.

In a medium-term forecast slightly less optimistic than those made by the government and international ratings firms, the NBG chairman of the board recalled that growing public and private debt will eventually affect government and monetary policies, possibly resulting in serious future restrictions. He also said that the rate of investment in Greece remained too low.

“The interest rates we have seen over the past 10 years were a parenthesis, and one that has pinned those dealing with macroeconomics to the wall,” he said. “The market shows that inflation will rise from 1.5% to 2.5% in the future, and I believe that there will be higher inflation still over the following decade,” he added.