BUSINESS

Commission’s winter forecast points to Greek economic spring

By Eleni Varvitsioti

The winter forecasts of the European Commission confirmed on Tuesday that the Greek economy is emerging from the shadows of recession with expected growth this year reaching the target of 0.6 percent.

The forecasts, presented in Strasbourg, also showed that Greece enjoyed a primary surplus last year amounting to 2.2 percent of gross domestic product, also within the estimate of the 2014 budget.

“Greece has for the first time since 1948 reached a current account surplus,” European Economic and Monetary Affairs Commissioner Olli Rehn said, adding that it is also likely to show a primary surplus for 2013 as well.

A Finance Ministry source said on Tuesday that “the winter forecasts of the Commission confirm the validity of the government’s estimates on the application of the 2013 budget. According to both the Economic Policy Program and the European System of Accounts, Greece has achieved a higher-than-forecast primary surplus even earlier.”

A spike in tourism which began in the spring of 2013 played a major role in reversing a 3.7 percent contraction in 2013 to a 0.6 percent expansion this year, the report stressed. Even more impressive is the forecast for growth of 2.9 percent of GDP next year.

The report stressed that these positive estimates will materialize only if all targets in the Greek fiscal adjustment program are met this year and next via the measures currently under negotiation between Athens and its creditors. It also warns of risks in policy changes “that could undermine confidence, affecting investments and exports.”

Unemployment is set for a moderate decline by 2015, from 27.1 percent in 2013 to 24 percent next year, thanks to salary regulations, programs to bolster employment and the increase in investments expected in the next two years.

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