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IMF revises projections for growth, primary surplus and unemployment in Greece

The International Monetary Fund has revised, downwards, its forecast for GDP growth in Greece for 2018, to 2 percent, down from 2.6 percent that it had forecasted last autumn and further down from 2.3 percent given by the Greek government for the current year.

The forecast was included in the Fund’s (World Economic Outlook report. Moreover, the Fund also lowered its forecast for the country in 2019, from 2 percent to 1.8 percent.

In terms of the consumer price index in the still bailout-dependent country, the IMF forecasts an increase of 0.7 percent in 2018, down from 1.1 percent in 2017. For 2019, the same forecast, 1.1 percent, is foreseen.

The unemployment rate is expected, according to the IMF, to ease to 19.8 percent for the ongoing year, down from 21.5 percent in 2017; dropping to 18 percent in 2019.

The IMF foresees that the country’s current account balance will be -0.8 percent in 2018, similar to 2017, while it will shrink by 0.6 percent in 2019.

The IMF also released an improved forecast for Greece’s primary budget surplus performances in 2017 and 2018 (as a percentage of GDP), although accompanied by a worsening debt-to-GDP ratio.

The forecasts were included in the Fund’s Fiscal Monitor report.

Specifically, the IMF forecasts for Greece are:

Α. Primary surplus:

  • 2017:   3.7% (up from 1.7% in October 2017)
  • 2018:   2.9% (up from 2.2%  in October 2017)
  • 2019-2022: 3.5%  (this forecast is the same as announced last October)
  • 2023: 1.5% (the first time a forecast has been made by the IMF for)

Β. Debt (as a percentage of GDP)

  • 2017: 181.9% (from 180.2%, the previous forecast from October 2017)
  • 2018: 191.3% (up from 184.5%)
  • 2019: 181.8% (up from 177.9%)
  • 2020: 177% (up from 171.4%)
  • 2021: 172.2% (up from 165.4%)
  • 2022: 168.7% (up from 161.2%)
  • 2023:165.1%

Specifically, IMF said the still bailout-dependent country is forecast to reach a 3.7-percent primary budget surplus in 2017, a significant improvement from the Fund’s 1.7-percent forecast last autumn.

The forecast comes days before Greece’s independent statistics authority is set to release a first official estimate for the course of the fiscal target for 2017 – a target that Greece must exceed, as per a memorandum-mandated obligation.

In terms of the closely watched debt-to-GDP ratio, the IMF pointed to lower than previously expected growth in the recession battered country, until 2019, as increasing the figure.

The debt-to-GDP ratio is expected to top off in 2018 at 191.3 percent of GDP.

The IMF has still to decide whether it will participate in the Greek program. Until it does, Greeks will have waved Goodbye 1000 years.

PS I personally wonder the IMF still dares issuing projections for Greece…. One just has to recall all the wrong projections based on wrong calculators and two shoes to ugly feet…

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