ECONOMY

Alogoskoufis sees threat from rising oil prices, interest rates

Finance Minister Giorgos Alogoskoufis said yesterday Greece’s economic growth could be at risk from rising oil prices and interest rates but added that to date the economy was performing well. «Developments in the first quarter of 2006 are positive,» Alogoskoufis told reporters after a Cabinet meeting. «But there are two risks, as you know, oil prices… and the possible increase in interest rates in the European Union.» He gave no figures but said the pace of economic growth, which was 3.7 percent in 2005 and estimated at between 3.4 and 3.8 percent this year, was satisfactory, while efforts at cutting the budget deficit and make economic reforms were on track. «I think that the developments in 2006 will be positive both for household incomes and for growth and employment,» he said. Greece has been struggling to bring down its unemployment rate – at 9.9 percent in 2005, more than a percentage point above the eurozone average. The government has launched a series of reforms to boost competitiveness and reduce the budget deficit to below 3.0 percent of gross domestic product. Greece has vowed to bring its budget deficit to 2.6 percent of GDP in 2006. (Reuters)