In World Economy News 17/10/2016
Greece will return to economic growth this year after many years of recession, contrary to the government’s previous projection for a slight drop in output, due to a strong summer tourism season and a high take-up of EU funds, Prime Minister Alexis Tsipras said.
The Greek economy has shrunk by about a quarter since 2008, as governments have imposed a steady stream of deeply unpopular fiscal reforms in return for repeated international bailout programs.
Earlier this month the government forecast in a draft budget plan that the economy would contract 0.3 percent this year.
The government expects the economy to expand 2.7 percent next year, propped up by the trickle-down impact of bailout cash inflows and resurgent private demand.
“We are almost certain that this year will close with a positive growth rate after many years, a small but positive growth rate,” Tsipras said in a speech at his leftist party three-day national congress.
Speaking at the same conference on Thursday, Tsipras signaled his government was running out of patience after repeatedly calling for debt relief from its lenders, the European Union and the International Monetary Fund.
“As we abide by the accord, we expect the same thing from our partners,” he said. “No delays, no foot dragging, no postponement will be tolerated.”
Athens this month successfully concluded a first review of its current, third aid program, worth up to 86 billion euros.
Tsipras said Greece now aimed to wrap up a second series of reforms very soon to qualify for debt relief and inclusion in the European Central Bank’s asset-buying program.
The lenders have promised to help reduce Greece’s public debt, which at 176 percent of GDP is the highest in the euro zone, to manageable levels. But they have yet to agree on how this will work.
Euro zone governments have offered Greece debt relief in 2018, but left key details to be decided later while they try to bridge Germany’s view that no immediate action is needed and the International Monetary Fund’s call for decisions now.
Source: Reuters (Reporting by Angeliki Koutantou; Editing by Hugh Lawson)
