IMF: Risks from political deadlock in various countries such as Greece and the US

IMF: Risks from political deadlock in various countries such as Greece and the US

Athens, April 14, 2016/Independent Balkan News Agency

By Spiros Sideris

In a number of countries such as Greece, the USA, Australia, Brazil, South Africa and Venezuela, the IMF sees political risks to the budgetary targets in its annual report for fiscal developments (Fiscal Monitor). According to the report, “the political cycle or a possible political deadlock can cause complications in the implementation of policy or discourage bold action in a number of states”.

Specifically for Greece, the IMF does not include specific provisions pending completion of the evaluation of the Greek economy.

For 2015 however, the IMF says that the figures reflect the preliminary estimates of the Fund’s staff in achieving the budgetary targets, which are subject to revision, given the high uncertainty associated with potentially significant adjustments of the amounts that can be made to accrual. This report, which is titled “We undertake action now, we act together”, contains information on Greek fiscal figures for 2015, different than those cited by the Greek government.

The IMF report

In particular, the Fund raises the fiscal deficit of 2015 to 4.2% of GDP, the primary deficit to 0.6% of GDP, the cyclically-adjusted general government deficit at 1.1% of GDP and the cyclically adjusted primary surpluses to 2,3% of GDP. For public revenue, it reports that they amounted to 45.8% of GDP and estimates that public expenditure was 50% of GDP. Finally, it estimates that public debt in 2015 stood at 178.4% of GDP.

For 2016, no budgetary projections are included in the report.

However, the draft memorandum between the Greek Government and the IMF, which was released by Reuters on Tuesday, says that Greece will have a primary deficit of 0.5% this year, a primary surplus of 0.25% in 2017 and a primary surplus of 1.5% in 2018.