Growth set for return in 2014

The draft budget for 2014, tabled on Monday in Parliament, contains three positive messages regarding the course of the country’s economy: An end to the six-year recession, the consolidation of the primary surplus for 2013 to over 300 million euros and, crucially, plans for the country’s return to the markets next year.

The first draft, which has been forwarded to the country’s creditors for approval, provides for 0.6 percent growth next year along with a reduction in unemployment from the current level of over 27 percent to 26 percent.

The primary surplus, meanwhile, is estimated to amount to some 344 million euros or 0.2 percent of gross domestic product this year, up from the 2013 budget forecast for 0 percent, to climb to 2.84 billion euros or 1.6 percent of GDP in 2014.

“As long as we are consistent with our obligations we will seek the contribution of our partners in helping toward the lightening of the debt according to the decision of the Eurogroup in November 2012,” Alternate Finance Minister Christos Staikouras said.

Taxpayers will be asked to pay an additional 2.16 billion euros in taxes next year. Direct taxation will climb from 19.17 billion euros this year to 21.33 billion in 2014, while indirect taxation is expected to stay the same as this year, at 24.5 billion euros despite the further decline expected in consumption.

Primary spending will be reduced next year by 2.77 billion euros, according to the draft budget.

With Greek debt dropping from 175.5 percent of GDP (321 billion euros) to 174.5 percent (319.4 billion) next year, the government hopes to secure a positive reception from markets, which it intends to return to in the latter half of 2014. Staikouras stressed that neither the amount nor the conditions of new Greek bonds have been decided yet, but added that the political decision to this end has been made.