Eurostat, IMF come fact-checking
The approval process for the upward revision of gross domestic product continues with a visit by a Eurostat mission to Athens, which began yesterday. The EU statistics service officials will monitor whether Eurostat rules and methodology were adhered to in the procedures followed during the revision which led to an increase of nominal GDP by about 26 percent from 1994 onward. The Eurostat mission will complete its visit next Tuesday and then submit its conclusions to the competent gross national income (GNI) committee which will then make a judgment either during its ordinary meeting next month or in an extraordinary meeting in September. If, as the government expects, the revised data of the National Statistics Service on GDP are approved, Eurostat will proceed with a new calculation of the public debt and the budget deficit which it will make public in October. Estimates by the Economy Ministry suggest that the 2006 deficit will fall to 2 percent of GDP from 2.6 percent and the public debt to 83.2 percent of GDP from 104.1 percent. At the same time, the European Commission will calculate the additional contribution Greece must pay into EU coffers as a result of the revision, expected to come to about -2 billion. The revision is certain to alter the general picture everyone has of the Greek economy, with as much as 72 percent now being produced by the service sector. With the 2006 GDP rising to -245.6 billion from -195.3 billion, public spending goes down to 20.3 percent of GDP, instead of 25.6 percent. Notably, this will also show the real extent of tax evasion, as tax revenues are estimated to fall below 20 percent (about 18.2 percent) from 23 percent before the revision. Separately, a team of International Monetary Fund (IMF) experts will be in Athens next week to check developments after the EU’s recent lifting of the regime of fiscal supervision for excessive deficits. In particular, the visitors, who have already submitted a questionnaire to the Greek government, are expected to focus on the sustainability of the recent progress whereby the fiscal deficit was brought to under 3 percent of gross domestic product. The IMF has particularly expressed concern over the country’s public debt, which is estimated at -250 billion, requiring about -35 billion in servicing annually.
