ECONOMY

FinMin disputes OECD forecast

Finance Minister Yannis Stournaras said late on Wednesday that a report by the Organization for Economic Cooperation and Development (OECD), predicting a seventh consecutive year of recession in Greece in 2014, will be proven wrong.

In its report issued earlier on Wednesday the OECD had forecast that the Greek economy would shrink by 4.8 percent this year and 1.2 percent next year.

However, speaking on the sidelines of the OECD ministerial conference in Paris, Stournaras stated: “We disagree with that figure. The European Commission and the International Monetary Fund also disagree with it. I believe this will be proven wrong and we will be right, as I believe that the GDP will be just under +1 percent [next year].”

His view was also backed on Wednesday by the annual report of the Bank of Greece, which expects gross domestic product to contract 4.6 percent this year followed by growth of 0.6 percent in 2014.

The OECD further expects unemployment to reach 27.8 percent this year and 28.4 percent in 2014, while the country’s debt is estimated at 175.1 percent of GDP in 2013 and 180.6 percent in 2014. The BoG report sees unemployment stabilizing at 28 percent this year and starting to drop from 2015. It adds that inflation will be in negative territory at -0.3 percent in 2013 and deems a primary surplus very likely at the end of the year.

Stournaras told Reuters on Wednesday that Athens will proceed to a small bond issue next year after being left out of the money markets for a long time. “Interest payments have fallen a lot, a lot of amortization was pushed to the future, so [the bond issue] is going to be small,” he said.

Meanwhile an inter-party committee comprising members of the three coalition government partners decided on Wednesday to exempt farmers from the single property tax which as of next year will replace the so-called FAP property tax and the extraordinary property levy paid via electricity bills. This means that other property owners will have to shoulder the share of the tax that farmers would have paid from 2014.