IMF sees major debt reduction

IMF sees major debt reduction

The International Monetary Fund sees Greece returning to fiscal consolidation, with systematic achievement of primary surpluses and debt deleveraging in the coming years, per its spring fiscal report, published on Wednesday.

The IMF forecasts do not differ substantially from those of last October in terms of the primary outcome, but see a slightly faster deleveraging of public debt, with the contribution of inflation and growth.

According to the Fund’s Fiscal Monitor report, the primary budget result is projected to return to a surplus of 0.4% of gross domestic product this year (against 0.7% of GDP in the government forecast), from a deficit of 1.5% of GDP in 2022. The government has already announced that the primary deficit in 2022 was close to zero, which is also expected to emerge from Eurostat data on April 21, as part of the Excessive Deficit Procedure.

The IMF then projects a primary surplus of 1.4% of GDP in 2024, 1.6% in 2025, 1.8% in 2026 and 2% of GDP in 2027 and 2028. What is most striking is the decline in debt as a percentage of GDP, from 200.7% of GDP in 2021, to 177.4% in 2022. It is seen as 166% this year and 143.6% of GDP in 2028.

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