Greek economy to grow 2.8pc in 2020

October 08, 2019

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ATHENS: Greece expects its economy to grow by 2.8 per cent in 2020 whilst respecting fiscal pledges to the country’s creditors, a draft budget released on Monday said.

The draft also forecasts an unemployment fall to 15.6pc, from 17.4pc this year, the finance ministry said.

EU-IM creditors want Greece to pursue economic and fiscal reforms and privatisations and achieve primary budget surpluses - which exclude government debt interest payments - worth 3.5pc 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 3.56pc, 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 180pc of gross domestic product, and remains under strict supervision by its creditors.

Outgoing IMF chief Christine Lagarde last month called the 3.5pc 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 decade-low borrowing rates on Greek debt. Within days of taking office, it sold a seven-year bond at a record low yield of 1.9pc.

Published in Dawn, October 8th, 2019