ECONOMY

Contraction of GDP seen to rise by 0.5 pct

Given the likely impact of the crisis in Cyprus on the Greek economy, the government in Athens has decided to accelerate the process of returning state dues to taxpayers and suppliers.

Economic activity appears to be worse than anticipated, and under the burden of developments in Cyprus – that also affect a number of Greek companies and tourism – the Finance Ministry expects gross domestic product to shrink this year by an additional 0.5 percent on the 4.5 percent originally anticipated.

Prime Minister Antonis Samaras ordered the Finance Ministry last Thursday to proceed with tax refunds of 3.2 billion euros as soon as possible and to pay some 8 billion euros in arrears within 2013 so as to channel some desperately-needed cash into the local market. This way, the government expects the economy to start rebounding and hopes to help taxpayers and companies fulfill their own obligations to the state.

Acting on the orders of the prime minister, the General Secretariat for State Revenues and the General State Accounting Office are already developing mechanisms for the daily monitoring of the course of tax refunds and arrears repayment.