House Budget Office: Positive developments in the Greek economy

House Budget Office: Positive developments in the Greek economy

There are positive developments in the Greek economy, despite the uncertainties of the international scene, and it is particularly critical that the evaluation process is completed successfully, in order for the tranche to be paid, to send a positive message to the markets and advance the critical reforms it envisages. This is the message send by the Budget Office of the State to the House, through its quarterly report on the Greek economy, which was presented today by its head, Fragiskos Koutentakis.

Beyond that, it finds uncertainties related to developments in the global economy, the amount of NPLs, the completion of actions related to the disbursement of profits by SMPs and ANFAs, the possible budgetary pressures from retroactive claims, in conjunction with the electoral cycle and the implementation of the new fiscal management framework.

Especially in the last part of uncertainties, the head of the Office, Fragiskos Kouttendakis, said that there is need for recruitment, as well as education of the financial services of the various ministries and agencies, so that the work that has been done would not be lost.

In favour of the increase in the minimum wage

An important part of the report concerns the impact of the recent increase in the minimum wage by 11%. The overall conclusion of the Office is that no significant impact on competitiveness should be expected, as the higher rates of employees who receive the minimum wage are in sectors of the economy which address the domestic demand.

In fiscal developments, the Office data show that last year, the primary surplus was higher by EUR 700 million compared to 2017, but this does not give rise to comparable conclusions as to what happened with the level of the primary surplus in program terms, as a different methodology is followed.

At several points in his placement, Koutentakis stressed the particular importance of the timely completion of the memorandum commitments, in order, on the one hand, for the tranche to be released and on the other to avoid a negative signal on the markets, at the same time avoiding the agreed reforms from lagging behind.

The increase in the current account deficit (EUR 3.8 billion in 2018) was also noted. Although the gap in the balance is not considered to be large, what is emphasized is the enlargement trend, which is expected to be strengthened./IBNA