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IMF’s projections on Greece’s economy, Fund presses for banks withdrawal from the Balkans

Greek economy is expected to grow by 1.8 pct this year, 2.6 pct in 2018 and 1.9 pct in 2019, the International Monetary Fund (IMF) said on Monday.

In its report on European economy, the IMF said it expected a 10.8 pct increase in net investments this year, rising to 11.8 pct in 2018 and 13.1 pct in 2019 in Greece, while the country’s fiscal deficit was expected to reach 1.7 pct of GDP this year, falling to 1.1 pct in 2018 and presenting a fiscal surplus of 0.2 pct in 2019.

The IMF said the Greek public debt was expected to reach 180.2 pct of GDP this year, rising to 184.5 pct in 2018 and falling to 177.9 pct of GDP in 2019, while the country’s current account deficit will reach 0.2 pct this year and 0.1 pct in 2018 and 2019.

The IMF said it expected domestic demand to rise 0.6 pct this year, 2.4 pct in 2018 and 1.9 pct in 2019, while the inflation rate is estimated at 1.2 pct this year, rising to 1.3 pct in 2018 and 1.4 pct in 2019.

The unemployment rate is projected to fall to 22.3 pct of the workforce this year, to 20.7 pct in 2018 and 19.5 pct in 2019.

The IMF noted that Greece is the only country in Europe presenting a large output gap, with the real GDP moving much lower compared with its potential.

The Fund recommended strengthening of efforts to combat corruption in Greece and the withdrawal of Greek banks from the Balkans. Banks withdrawal from the Balkan is one of the lenders’ prerequisites oncluding in the third bailout agreement signed in summer 2015.

In its Regional Economic Outlook report, the IMF said further that Europe’s economy is now hitting its stride but a disruptive Brexit could result in “appreciably” lower growth for both Britain and the eurozone.

“The current recovery looks increasingly assured,” the imf said adding this was “partly driven by central bank stimulus and low interest rates, but also by improving fundamentals, as evidenced by a pick-up in investment across a broad range of economies.”

“This recovery looks increasingly durable,” the deputy director of the IMF’s European Department, Joerg Decressin, told Reuters at a presentation of the report published on Monday.

The IMF has also been left badly bruised by its involvement in Greece’s rolling crisis over the last seven years, which often saw it at odds with Athens and the likes of Berlin.

“We do not have an objective to retreat from supporting Europe, on the contrary,” Decressin said.

“We remain at the disposal of our European shareholders to help with any crisis if and when it emerges. We also hope to continue to play a useful role via our surveillance.”  [amna, reuters]

PS And with these IMF predictions I remembered all the wrong IMF projections based on wrong calculators and all the lip services by IMF officials like Lagarde’s statement in 2013, who admitted they did not know austerity would do so much harm to Greece and all those Greeks who lost their lives or just their dignity because of all the above.

 

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