Greece keeps 2.7% growth estimate
GREECE expects to post 2.7 percent growth in 2017 after years of nearly consecutive recession in a budget that also predicts an above-target primary surplus.
The budget, to be voted on by parliament on December 10, includes extra taxation on cars, cellphones, pay TV, fuel, tobacco, coffee and beer.
Greece’s economy this year is set to shrink by 0.3pc according to the latest estimates, continuing a slide uninterrupted since 2009 except for one year, 2014.
Under the terms of its latest EU bailout, Greece must register primary budget surpluses (before debt service) of 0.5pc of GDP this year, 1.75pc in 2017 and 3.5pc in 2018.
The budget tabled last week said Greece beat its 2016 target by posting a 1.09pc primary surplus, and will do so again in 2017 with a surplus of 2pc.
It kept the growth target of the draft budget tabled in October, but improved the surplus, which at the time had been listed at 1.8pc.
There are some, including the International Monetary Fund and Bank of Greece governor Yannis Stournaras, who say the 3.5pc target in 2018 is unrealistic.
Because of this difference of opinion, the IMF has said it won’t give a penny to the latest bailout – Greece’s third since 2010 – until it sees a concrete plan from the Europeans to cut substantially Greece’s massive debt burden.
Despite strong opposition by Germany, Eurogroup chief Jeroen Dijsselbloem last week said “shortterm debt measures” could be discussed in December.
The debt will grow to 315 billion euros (US$334 billion) or around 180pc of output this year, the ministry said.
The Greek government has undertaken to cut the pensions and benefits of civil servants if it fails to reach the targets and to proceed with a controversial new round of privatisations. –