Fitch keeps rat­ing with ‘sta­ble’ out­look, as bud­get aims to close gap

Financial Mirror (Cyprus) - - FRONT PAGE -

Fitch main­tained Greece’s ‘B’ junk rat­ing and sta­ble out­look on Fri­day, cit­ing the “re­mark­able bud­getary adjustment” by Athens in re­cent years. It pro­jected a pri­mary bud­get sur­plus of 1.5% of GDP this year, with­out rul­ing out a slight over-per­for­mance.

The rat­ing agency said it ex­pects the cur­rent loan re­view to be con­cluded by the end if the year, but sees some risk that it may slip into early 2015, with in­vestors al­ready pun­ish­ing Greek bonds over the stale­mate on find­ing a common can­di­date for the elec­tion of a new pres­i­dent, al­beit for a cer­e­mo­nial po­si­tion.

“Medium-term fi­nanc­ing re­mains pred­i­cated on gov­ern­ment stay­ing on track with its of­fi­cial cred­i­tors,” Fitch said.

The gov­ern­ment, mean­while, pushed ahead with plans for a near-bal­anced bud­get next year, ig­nor­ing ob­jec­tions from the Troika of in­ter­na­tional lenders who say Athens is set to miss its deficit fore­cast.

The gov­ern­ment stuck to its fore­cast in an up­dated 2015 bud­get plan that was sub­mit­ted to par­lia­ment on Fri­day with­out the ap­proval of the lenders, mark­ing its first near-bal­anced bud­get in more than three decades.

“We are fight­ing for it,” Fi­nance Min­is­ter Gikas Har­dou­velis told re­porters. “There is some con­ver­gence, but they are push­ing us on the bud­get.”

After nearly five years on aid that has come at the price of painful cut­backs, Greece has made progress in get­ting its fi­nances in or­der and its econ­omy has be­gun to ex­pand again. The bud­get re­it­er­ated the econ­omy would grow 0.6% this year and 2.9% in 2015.

It also pre­dicted the bud­get deficit for this year would be larger than pre­vi­ously es­ti­mated, stand­ing at 1.3% from 0.8% fore­cast in the Oc­to­ber draft bud­get.

Athens also low­ered its tar­get for a pri­mary sur­plus this year to 1.8% from 2% pre­vi­ously and slightly raised the tar­get for next year to 3% from 2.9%.

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