OECD: Gov’t won’t meet tar­get

Re­port an­tic­i­pates eco­nomic re­bound of just 1.3 pct next year, against a state bud­get forecast for 2.7 pct

Kathimerini English - - Focus -

Eco­nomic con­di­tions will im­prove in Greece next year, but the gov­ern­ment’s am­bi­tious tar­get of a 2.7 per­cent eco­nomic re­bound will not be achieved, the Or­ga­ni­za­tion for Eco­nomic Co­op­er­a­tion and Devel­op­ment said in a re­port re­leased yes­ter­day. The OECD added that much more must be done for the Greek debt to be­come sus­tain­able.

The in­ter­na­tional or­ga­ni­za­tion noted that the Greek econ­omy has been per­form­ing bet­ter than an­tic- ipated in the sec­ond half of 2016 and es­ti­mated that the mo­men­tum will grow in 2017 and 2018 as the re­forms start fetch­ing re­sults.

It added that the com­ple­tion of the sec­ond bailout re­view will strengthen con­fi­dence, sta­bi­liz­ing the eco­nomic and po­lit­i­cal en­vi­ron­ment.

How­ever, the or­ga­ni­za­tion be­lieves that the tar­get for 2.7 per­cent growth next year will not be met and sets the bar sig­nif­i­cantly lower, at 1.3 per­cent for 2017 and 1.9 per­cent in 2018. As for this year, it an­tic­i­pates zero growth for the econ­omy, while dis­cern­ing a rise in em­ploy­ment.

The im­ple­men­ta­tion of re­forms to re­duce bu­reau­cracy and lib­er­al­ize mar­ket sec­tors such as those of en­ergy and trans­port will in­crease pro­duc­tiv­ity and growth, while open­ing up so-called closed-shop pro­fes­sions will at­tract in­vest­ments mainly to small and medium-sized enterprises, the re­port forecast.

As re­gards the huge vol­ume of non­per­form­ing loans, the OECD called for de­ci­sive man­age­ment of the prob­lem and the en­force­ment of all rel­e­vant leg­isla­tive ini­tia­tives, say­ing that oth­er­wise the bad loans will un­der­mine the re­cov­ery of credit ex­pan­sion and there­fore the sup­port of in­vest­ments.

The re­port fur­ther warns that even if the am­bi­tious medium-term pri­mary sur­plus tar­gets set by the 1.0588 cred­i­tors are met, the high pub­lic debt will un­der­mine con­fi­dence.

It stressed the need for the broad­en­ing of the tax base and the un­hin­dered op­er­a­tion of the in­de­pen­dent Gen­eral Sec­re­tar­iat for Pub­lic Rev­enue so as to im­prove tax com­pli­ance and col­lec­tion.

It also an­tic­i­pates a de­cline of the jobless rate from 24.9 per­cent in 2015 and 23.5 per­cent this year to 23.1 per­cent in 2017 and to 22.7 per­cent in 2018.

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