Greek economy to grow 2.8pc in 2020: draft budget

Greece expects its economy to grow by 2.8 percent in 2020 whilst respecting fiscal pledges to the country's creditors, a draft budget released Monday said. The draft also forecasts an unemployment fall to 15.6 percent from 17.4 percent this year, the finance ministry said.

EU-IMF creditors want Greece to pursue economic and fiscal reforms and privatisations and achieve primary budget surpluses - which exclude government debt interest payments - worth 3.5 percent of GDP in the coming years. Prime Minister Kyriakos Mitsotakis wants to renegotiate this target with the creditors - but has agreed to retain it in 2020 to the tune of 3.56 percent, the ministry said.

As Greece recovers from a six-year recession and a nearly decade-long debt crisis, the economy remains fragile.

Emerging from its third straight bailout last year, it has a public debt of more than 180 percent of gross domestic product, and remains under strict supervision by its creditors. Outgoing IMF chief Christine Lagarde last month called the 3.5 percent level "excessive" and an obstacle to Greek economic recovery.

Elected in July on a platform of boosting economic growth and investment, Mitsotakis' new conservative government has made boosting slugging growth a priority, powered by tax cuts and accompanied by privatisation deals. The administration also seeks to capitalise on decadelow borrowing rates on Greek debt. Within days of taking office, it sold a 7-year-bond at a record low yield of 1.9 percent.

It was the third bond sale this year, a first since Greece's economic crisis erupted in 2010. Greece has also requested to repay 2.8 billion euros in IMF loans before to save interest rate costs. After a decadelong crisis, painful reforms and 289 billion euros ($330 billion) in rescue loans, the country exited its third and final international bailout in August 2018.

Meanwhile, Greece sold 488 million euros ($535.82 million) of three-month treasury bills to refinance a maturing issue with the yield turning negative for the first time ever, the country's debt agency PDMA said on Wednesday.