ECONOMY

IMF sees debt soaring over 200 percent

imf-sees-debt-soaring-over-200-percent

The International Monetary Fund estimates that years of efforts to contain Greece’s national debt will go to waste due to the coronavirus pandemic, as it projects the country’s dues will soar to 200.8 percent of gross domestic product this year, with a primary budget deficit at 5.1 percent of GDP after five years of primary surpluses, according to the Fund’s Fiscal Monitor report released on Wednesday.

The head of the IMF’s European Department, Poul Thomsen, told a press conference on Wednesday that Greek economic growth will suffer a huge blow this year because the country is heavily reliant on tourism, shipping and transport and because it has many small and medium-sized enterprises.

Thomsen is very familiar with the Greek economy and its intricacies after having been the chief representative of the Fund in Greece over the best part of the previous decade, and he added that due to the weaknesses of the local credit system, the recovery of the Greek economy will not come easily.

He further noted that in spite of the progress recorded recently, Greece has limited fiscal leeway to react to the new crisis.