Disagreement between the Government and the institutions on growth and the surplus remains

Disagreement between the Government and the institutions on growth and the surplus remains

The Government and the European institutions have come up with joint estimates for 2019 that the primary surplus will be at 3.7% of GDP this year, with a social dividend of around € 300 million expected to be raised.

The International Monetary Fund’s projections are set at 3.3%, as shown in the Fiscal Monitor tables of the Fund’s special report released today.

Apart from that, it appears that the government and the European institutions have agreed on the figures for the preliminary draft budget of 2020, except for the rate of growth, for which the institutions are reported to have substantial reservations about the target of 2.8%. However, IMF estimates that next year the primary surplus will stand at 2.6% of GDP or almost a unit below the current 3.5% GDP surplus.

It is noted that in the World Economic Outlook released yesterday, the Fund forecasts growth for the Greek economy of only 2% this year and 2.2% in 2020, below the budgetary threshold, while for 2024 growth is estimated barely by 0.9 %.

Furthermore, the surpluses for the two-year period 2021-22 are estimated at 2.5% of GDP, at 2.3% in 2023 and at 2% in 2024. After that, in 2024, according to the Fund’s forecasts, the growth rate of the Greek economy will be set only at 0.9%.

Big drop in debt

Fiscal Monitor’s forecasts for a gradual widening of fiscal deficits stand out as well. A surplus of 1% of GDP is found for last year, a deficit of 0.3% of GDP is projected for this year, which will reach 1% in 2020 and will end up at 1.6% of GDP in 2024.

Revenue and expenditures rates as a percentage of GDP follow a downward tendency. Public revenues from 47.7% of GDP this year will reach 44.1% of GDP in 2024, whereas public spending from 47.5% of GDP will dip to 45.7% of GDP.

As for the public debt, it is projected to drop significantly from 176.6% of GDP this year to 154.1% of GDP in 2024, due to the agreement signed by the SYRIZA government. /ibna