Government revises 2001 growth forecast to 4-4.1 pct

The Greek government yesterday yet again revised its growth projections for this year, but said it plans to stick firmly to budgetary constraints imposed by the eurozone’s stability and growth program. Economy and Finance Minister Nikos Christodoulakis said growth this year is expected to stay at the 4 to 4.1 percent range, downgrading the 4.6-percent projection set out in the 2002 draft budget for this year. The previous forecast was itself a revision of the 5-percent target set out in the 2000-2004 stability and growth pact unveiled last year. Despite the downgraded target, Greece is set to outpace other eurozone member states this year, Christodoulakis told reporters yesterday after briefing Prime Minister Costas Simitis on the finance ministers’ meeting in Brussels at the beginning of the week. The official optimism was justified by a preliminary report released in September by the Paris-based Organization for Economic and Cooperation and Development, which projected 3.7-percent GDP growth for Greece this year, the second-highest level among member countries. It sees Greece taking top spot in 2002, with an estimated growth rate of 4 percent. The OECD’s official report is due out late this month. Deputy Finance Minister Giorgos Floridis told reporters after a ministerial meeting that the State plans to trim consumer spending by 100 billion drachmas to offset projected declining revenues. Christodoulakis also affirmed the State’s intention to maintain fiscal discipline and reduce public debt. The 2002 draft budget specifies a budget surplus equal to 0.5 percent of GDP for this year, rising to 1.3 percent for the following year. This will be the first surplus in Greece’s postwar history. Public debt is projected to fall below 100 percent of GDP this year and settle at 98.9 percent. It should decline further to 95.2 percent in 2002. Greece’s determination to slash its debt level is tied to the privatization program. The minister underscored his resolve to speed up the divestment program in his first public announcement after his appointment to the Economy and Finance Ministry last month. This strategy aims at spreading risks, increasing liquidity and constantly upgrading the quality of our portfolio. At the same time, it ensures a satisfactory performance, the bank said in a statement.

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