Greece draft budget puts 2015 growth at 2.9%

ATHENS - Agence France-Presse

Greece's Deputy Finance Minister Christos Staikouras presents the government's draft 2015 budget to journalists, at the finance ministry in Athens on October 6, 2014. AFP Photo

Greece should climb strongly away next year from a six-year recession which axed a quarter of its economy, turning in growth of 2.9 percent, deputy Finance Minister Christos Staikouras said on Oct. 6.

The minister held to a forecast of a return to growth of 0.6 percent this year, an estimate which many economists think is unduly optimistic.
      
"We are going to convert the current stability into viable growth and social cohesion," he told a press conference on the budget.
      
The forecast for next year points to a strong upturn but from an exceptionally low point since the Greek economy and people are still weighed down by pension and pay cuts and a mountain of debt.
      
The country, which has been through six years of trauma following a rescue from near bankruptcy and radical economic reforms, has just benefited from a highly successful tourism season.
      
The Greek debt crisis marked the beginning of a wider debt crisis which nearly tore the eurozone apart and has led to several big eurozone-wide reforms.
      
Last month, credit rating agency Standard and Poor's estimated that this year the Greek economy would still be in recession, although much reduced, of 0.2 percent.
      
The draft budget has been approved by auditors from the International Monetary Fund, the European Union and the European Central Bank which rescued Greece with huge loans in return for deep budget cuts and other reforms.
      
The outline budget for next year also foresees a budget surplus before the cost of debt interest of 2.9 percent of gross domestic product, or 5.4 billion euros ($6.8 billion).
      
Last week the auditors, known as the "Troika", began the latest regular review of the economy and how reforms are progressing.
      
The minister underlined what he termed an improvement in the state of public finances which he put down in part to political stability during the last two years.
      
The crisis in Greece was followed by a period of strong political instability.
      
This was accompanied by strikes and demonstrations in anger at those who had allowed the crisis to develop, against political cronyism, and particularly against the austerity policies imposed by the IMF and EU, and against Germany, perceived to be the driving force of budget rigour.
      
The governing right-wing and Socialist coalition led by conservative Antonis Samaras is counting on reducing the debt burden next year to 168 percent of GDP or to 316 billion euros from 318 billion euros this year.
      
Greece, as a member of the eurozone, is bound by EU rules which state that the ratio of public debt to GDP should not exceed 60 percent or be falling structurally towards that level.