Until May of this year, the government and institutions will sit at the same table to assess the primary surplus of 2019 (Greek 3.5% commitment). At this point, it is expected that the voted cuts in pensions in 2019 and the reduction in the tax-free period of 2019-20, accompanied by counterparties, will be applied as long as the targets for a primary surplus of 3.5% are met.
Possibly, the Greek government seeks to reverse some of the measures in the negotiation, but there is a risk that it will face a possible IMF request for a progressive implementation even of the reduction of the tax-free rate planned for 2020. However, The IMF has taken steps back as far as Greece is concerned, showing more confidence in its prospects.
In this debate, the Greek side has two “weapons”: First, the primary surplus that seems to have reached 6.8 billions in 2017, or more than 4%, which shows that there will be a carry over both this year as well as the next. Second, the ultimate revised target set for last year for a 1.6% GDP growth may be revised again in the future and this time higher.
The increase in industrial production, manufacturing and export indicators makes some analysts estimate that they will eventually close to 1.8%. In any case, the above will be shown in the data to be released at the end of March, but may also be included in a subsequent review in the autumn…/IBNA