ECONOMY

Sustained growth seen as key against impact of war

Greece yesterday unveiled a three-pronged strategy focusing on growth, anti-inflationary and job-creation efforts to counter the fallout from a potential war in Iraq. «Our principal priority is to sustain growth by all means and to hold down inflation,» Economy and Finance Minister Nikos Christodoulakis said. Confirming the government’s target of 3.8 percent economic growth this year, he said more efforts will be made to bolster the tourism industry and to boost exports this year. Both sectors are expected to be hit hard by a war in Iraq, as tourists switch to other destinations and EU countries cut down on their imports in response to weak growth as well as geopolitical uncertainties. Christodoulakis said a marketing campaign will be launched to boost the country’s profile abroad while the national council of exports will convene on Monday to discuss ways to promote the sale of Greek products in foreign markets. The Third Community Support Framework is also expected to help keep the engine of growth running amid the geopolitical uncertainties. «We plan to speed up the absorption of community funds in the coming months, with some 400 million euros projected to flow into the country on a monthly basis,» Christodoulakis said. On the inflationary front, he said the government is aiming for core inflation of 3 percent by keeping price increases at public utilities below the inflation rate and ruling out any price hike in the transport sector. Checks will also be conducted in the food, restaurant and leisure sectors to head off unjustified price increases. Core inflation, which excludes the costs of fresh produce and fuel, averaged out to 3.6 percent last year. Bad weather in the last two months, however, took February core inflation up to 3.7 percent, with headline inflation soaring to 4.3 percent, the highest in more than a year. Annual harmonized inflation of 4.2 percent was close to two percentage points above the average eurozone level. «Three percent is absolutely feasible,» Christodoulakis insisted. Job creation was also singled out as an important tool to help the economy override the fallout of a war in Iraq, with the government expanding part-time work in the public sector. Christodoulakis ruled out one-off measures, namely, reduced fuel taxes, to give businesses a kick-start in the current slowdown, as examples in the past showed companies were more likely to abuse energy tax cuts by cutting back on supplies. He said the government does not plan to relax its fiscal stand despite the potential crisis. The European Central Bank yesterday warned eurozone countries not to use a possible war in Iraq as an excuse to «renege on their commitments to put their public finances in