ECONOMY

Better deficit outlook cited

The OECD sees Greece’s budget deficit at 1.5 percent of gross domestic product next year, closer to Greek government forecasts than a recent, more pessimistic European Commission prediction, the Imerisia daily reported yesterday. It said that the OECD sees the Greek deficit at 1.5 percent in 2004, a bit higher than the government’s 1.2 percent target, but considerably lower than the 2.4 percent forecast by the European Commission in late October. The OECD’s Economic Outlook is officially due out tomorrow. The figures are a welcome vindication for the Greek government, which in the face of harsh domestic criticism said figures in the Commission report were wrong. An EU spokesman has since said they might have overestimated the shortfall. The Greek report follows publication by Italy’s La Repubblica newspaper of a table of forecasts drawn from what it said was a copy of the OECD report, showing Greece’s deficit next year tipped at 1.6 percent of GDP. For 2003, the OECD forecasts a 1.7 percent deficit, the same as the Commission, and slightly higher than Greece’s 1.4 percent projection, the Imerisia paper said. Growth is seen at 4 percent for 2003 and 4.1 percent for next year, broadly in line with EU predictions, while the inflation forecast of the OECD again agrees with the Commission, at 3.6 percent for 2003 and 3.7 percent for 2004, it added. La Repubblica also gave the 2004 growth forecast as 4.1 percent. According to Imerisia, the OECD will forecast unemployment at 9.3 percent in 2003 against Greece’s prediction of 9.0 percent. Greece’s final 2004 budget draft, submitted to Parliament last week, envisaged the deficit dropping steadily over the next few years until it reaches balance in 2006. (Reuters)