IMF sees recession in outlook
Greece’s economy is seen slipping into recession this year, according to the International Monetary Fund (IMF) which is expected to lower its expectations for the country’s economic performance in its next outlook due in April. The IMF had forecast that Greece’s economy will expand at an annual pace of 0.5 percent in last month’s projections, but has since revised down its expectations for global growth. Predicting the course of Greece’s economy is «exceptionally difficult,» according to Miranda Xafa, alternate executive director on the board of the International Monetary Fund, who said that the timing of the economy’s rebound will depend on policies adopted by the conservative government. «The possibility of the long-term rebound will depend on whether the country will implement needed reforms to help boost competitiveness and improve productivity in the public sector,» she told Kathimerini. Neither of the two major political parties has efficiently handled the long-term challenges of the Greek economy, such as social security reforms and limiting the civil service, she added. The change in the IMF’s expectations for Greece may prompt the European Commission to also revise lower its forecast for the local economy. Currently, Brussels sees the Greek economy growing at an annual rate of 0.2 percent in 2009. Meanwhile, officials from ratings agency Fitch Ratings are expected to visit Athens this week to assess the state of the economy and Greece’s ability to service its large public debt.