Government sees growth of GDP at under 4 percent

The Greek government yesterday revised its growth outlook for 2003 to below 4 percent, saying the new target was more in line with global uncertainties but would still exceed European Union averages by a significant margin. Under the draft budget for 2003 presented last month, gross domestic product is projected to increase by 4.1 percent. Greece does not appear likely to meet the target in light of the downside risks to the global economy, Economy and Finance Minister Nikos Christodoulakis suggested yesterday. «The 2003 budget will include a revised growth rate which will be slightly below 4 percent. This is a more realistic perspective of Greece’s economic prospects in an uncertain global environment,» he said. The government’s more down-to-earth projection contrasts with a more upbeat forecast from the Organization for Economic Cooperation and Development. A draft report given to the Greek government last week estimates a 4.25 percent growth rate next year, according to Reuters. The Paris-based agency based its optimism on easy monetary conditions in Greece, the inflow of community funds, Olympic Games-related infrastructure projects and a recovery in Greek exports. The semi-annual economic outlook, to be published on November 21, however, could be revised. Christodoulakis said the Greek economy is expected to ride out the storm as a result of the strong dose of public investment spending planned for next year and cutbacks in public spending. Public investment outlays are due to increase by 13 percent next year against a 5.2 percent rise this year. Last month, the minister said a war in Iraq could shave a percentage point off the projected growth rate for 2003, pushing it down to 3-3.3 percent. Even after the sharp revision, Greek output would still be above EU averages. Both Germany and France are aiming for 2.5 percent growth next year, while Italy is looking to raise its GDP by 2.3 percent. Spain has set a 3 percent target. The final 2003 budget is due to be tabled in Parliament late next month. National output is expected to grow by 3.8 percent this year.