Sunday, April 21, 2024

Slow growth in Greece


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ATHENS, Greece (AP) – Greece will achieve better-than-expected budget figures in 2014 but unemployment will only decline slowly over the next four years, the country’s finance ministry said today.
The ministry said it expects to achieve a primary budget surplus – what’s left after debt and interest payments – of 2.3 per cent of the country’s annual economic output, up from its previous prediction of 1.5 per cent. It set a target of 5.3 per cent for 2018.
Achieving a primary surplus has been one of the main purposes of the austerity medicine the country has taken over the past few years.
After being locked out of international bond markets in 2010, Greece has relied on billions of euros of bailout funds from its partners in the eurozone and the International Monetary Fund.
In return it has had to impose tough spending cuts and tax rises alongside a wide-ranging economic reform program in order to get its public finances into shape and get Greece in a position to stand on its own again.
“Greece is entering a period of stability after many difficult years for businesses and households, and this was accomplished after great sacrifices,” Deputy Finance Minister Christos Staikouras said. “The country has safeguarded its place in Europe and regained international credibility. We have met and surpassed our program targets.”
The figures were released as part of a revised 2015-2018 budget plan submitted to parliament.
Even though Greece has made progress on the budget front, its economy will take a long time from the battering it has taken over the past few years. Though Greece is poised to start growing again soon after a recession, it’s around 25 per cent smaller than before it started.
The ministry struck to its prediction of 0.6 per cent growth this year, quickly improving to 2.9 per cent in 2015 and remaining above three per cent through 2018.
Progress in the jobs market, however, is expected to be slow.
The ministry predicted that unemployment would only fall below 20 per cent in 2016 from the current 28 per cent or so. By 2019, unemployment is expected to be 15.9 per cent, still around double the rate it was before the crisis started.
The social cost of the recession and the rise in unemployment has been acute across the country of around 11 million people.
In several neighbourhoods around Athens, thousands of residents gathered today to receive free food hand-outs by outdoor market vendors who launched an indefinite strike this week to protest new operating rules.


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