Eurostat set to endorse 2006 data showing Greek success in efforts to tackle excessive fiscal deficits

The European Union’s statistics service (Eurostat) is expected to endorse Greek 2006 fiscal data showing that the country has fulfilled the basic requirement for exiting two years of fiscal supervision. Eurostat’s approval will be contained in a report to be published on April 24 According to sources, the data will show that Greece last year managed to trim its budget deficit to below the EU-mandated ceiling of 3 percent of gross domestic product (GDP) – reducing it to 2.6 percent of GDP, from 5.2 percent in 2005. Specifically, net revenue rose 9.9 percent to total 46.29 billion euros, while primary spending was up 6 percent to reach 40.6 billion euros. The report is also expected to say that the public debt was down to 104.3 percent of GDP from 107.5 percent in the previous year. The data submitted to Eurostat were also accompanied by projections for the coming years, forecasting that the budget deficit will decline to 1.2 percent and the public debt to 91.3 percent of GDP by 2009. Economic growth is seen averaging 4 percent annually, inflation 2.8 percent and unemployment falling to 6.5 percent by 2009. The same sources said yesterday that Greek March inflation, due to be announced by the National Statistics Service (NSS) next week, will be around 2.6-2.7 percent. On the assumption that the price of oil will average $60 a barrel this year, the inflation rate is projected at between 2.8 and 3.2 percent. Industrial production in February is estimated to have risen 2.3 percent, against 1.8 percent in the previous year, which bodes well for the country’s economic growth rate. Building activity is also estimated to have picked up in January after many months, adding to the optimism. Despite a declining trend, Greek inflation remains significantly higher than the eurozone average of 1.8 percent. The differential erodes the competitiveness of Greek products and services in the eurozone. According to Bank of Greece data, the Greek economy’s competitiveness declined by 13.5 percent in terms of prices and 34 percent in terms of industrial labor costs in the period 2001-2006.

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