ECONOMY

Economic growth to resume in 2016, minister tells magazine

economic-growth-to-resume-in-2016-minister-tells-magazine

Greece expects its economy to resume growing this year, with an annual expansion of up to 1.5 percent, Economy Minister George Stathakis told the German magazine Wirtschaftswoche on Thursday, reversing a previous government forecast of a contraction.

In November, Greece forecast the economy would shrink by 0.7 percent in 2016, but the central bank said a couple of weeks later that a recovery in the second half of this year was “more likely.”

Stathakis said the impact of capital controls imposed by the government in the summer, when it was negotiating a third bailout with its eurozone partners, had been overestimated.

“Economic growth could reach 1.5 percent this year,” Stathakis told Wirtschaftswoche. “We won't have a budget deficit this year.”

He cited healthy tourism, rising exports and 4.5 billion euros ($4.90 billion) in structural funding from the European Union as the main sources of revival.

European creditors will start a review of reforms on Monday that were agreed under a third bailout package approved in August. They aim to finish in February. The package includes controversial reforms like changes to Greece's pension system.

EU officials said on Wednesday that Greece's eurozone partners were impressed with Athens' progress in implementing its bailout.

[Reuters]