IMF raises growth fore­cast for 2018

Fund sees lo­cal econ­omy grow­ing 2.6 per­cent next year, but projects ex­pan­sion will drop to 1 pct in 2022

Kathimerini English - - Focus - BY PROKOPIS HATZINIKOLAOU

The Greek econ­omy will grow by 2.6 per­cent next year, ac­cord­ing to an In­ter­na­tional Mon­e­tary Fund re­port, ex­ceed­ing the gov­ern­ment’s fore­cast for a 2.4 per­cent ex­pan­sion.

Yet de­spite the op­ti­mistic fore­cast in its World Eco­nomic Out­look re­port, the Wash­ing­ton-based Fund stresses its con­cern re­gard­ing the sus­tain­abil­ity of the na­tional debt through its pro­jec­tions for the pe- riod af­ter the end of the bailout pro­gram. The IMF sees growth in 2022 com­ing to just 1 per­cent. In pre­vi­ous re­ports it had ex­plained its low growth fore­casts by say­ing it didn’t ex­pect re­forms to be im­ple­mented.

In a spe­cial chap­ter of the re­port on “growth sur­prises for 2017,” the IMF points out that most of the world’s de­vel­oped coun­tries achieved have higher eco­nomic growth than ex­pected, while Greece is the state ranked low­est.

Such data of­fer a taste of what the dis­cus­sion will fo­cus on at Satur­day’s sched­uled meet­ing be­tween IMF Man­ag­ing Di­rec­tor Chris­tine La­garde, Finance Min­is­ter Eu­clid Tsakalo­tos and his al­ter­nate, Gior­gos Hou­liarakis.

If the IMF re­port – to be pub­lished in full to­day – re­tains its pri­mary sur­plus fore­cast for Greece at 2.2 per­cent of gross do­mes­tic prod­uct for next year, there may be a new dis­cus­sion on ad­di­tional fis­cal mea­sures of 2.3 bil­lion euros so as to reach the tar­get of 3.5 per- cent of GDP. If the IMF in­sists on this po­si­tion and the Euro­peans – es­pe­cially the Ger­mans – in­sist on the par­tic­i­pa­tion of the Fund in the Greek pro­gram, ne­go­ti­a­tions could stum­ble again, ham­per­ing the third bailout review.

It there­fore ap­pears that the IMF will play a cru­cial role in yet an­other review, and it is pos­si­ble La­garde will re­veal the Fund’s in­ten­tions to Tsakalo­tos and Hou­liarakis dur­ing Satur­day’s meet­ing, a week be­fore the cred­i­tors’ rep­re­sen­ta­tives are sched­uled to re­turn to Athens. Ob­vi­ously the talks will also fo­cus on the is­sues of the Greek banks, which un­til re­cently the Fund was de­ter­mined should be put through as­set qual­ity reviews. Even­tu­ally it set­tled for the Euro­pean Cen­tral Bank’s po­si­tion that their stress tests be brought for­ward to Fe­bru­ary 2018.

The agenda of Satur­day’s talks will also in­clude the mat­ter of the eas­ing of the na­tional debt, now that the Ger­man gen­eral elec­tion has taken place.

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