IMF expects recession and more jobless

Another grim forecast for the Greek economy came yesterday from the International Monetary Fund, which expects a two-year recession and a loss of 143,000 jobs by the end of 2010. In its report, the IMF expects Greek gross domestic product (GDP) to shrink by 0.2 percent this year and by 0.6 percent in 2010, even though it estimates that the first signs of recovery are emerging in the eurozone. The particularly negative forecast for the local economy is based on the fact that due to the poor state of the country’s public finances, particularly the high debt, Greece is not able to increase public expenditure with the aim of boosting economic activity. As a result, when other eurozone countries see their support packages bearing fruit, Greece will be sinking deeper into recession. Consequently, the unemployment rate is projected to rise from 7.5 percent last year to 9 percent this year and 10.5 percent in 2010. According to the latest labor market figures, the new unemployed this year will be 69,310, bringing the total jobless to 445,563. In 2010 an estimated 74,261 people will lose their jobs, taking the total figure to 519,824. In total this year and next, it is estimated that some 143,570 people will lose their jobs. The official jobless rate reported by the National Statistics Service soared to 9.4 percent in January 2009, which in absolute figures is equivalent to 465,692 people out of work.

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