Stournaras seeks clarification from IMF on fiscal multipliers and Greek program
Greek Finance Minister Yannis Stournaras has indicated he will ask for clarifications from the International Monetary Fund on what impact errors in its calculations have had on the country’s fiscal adjustment program.
“I will ask the IMF to inform us about the conclusions it draws with regard to Greece from its report about fiscal multipliers,” said Stournaras after Monday’s Eurogroup.
“Personally, I can’t draw any conclusions from the IMF’s report.”
In January, chief IMF economists Olivier Blanchard Daniel Leigh, titled “Growth Forecast Errors and Fiscal Multipliers”, set out how the Washington-based organization made incorrect forecasts about the impact that a rapid fiscal consolidation would have on certain economies, such as Greece’s.
They admitted that the impact had been underestimated by as much as three times.
A few days after the IMF admitted it may have underestimated the impact of fiscal multipliers at work in Greece, Finance Minister Yannis Stournaras on Monday suggested that the admittance might justify some adjustments to the debt-hit country’s austerity program.
“The IMF must not get caught up in academic analyses,” Stournaras said in a press briefing following a meeting of eurozone finance ministers in Brussels on Monday.
A working paper published last month by chief IMF economists Olivier Blanchard Daniel Leigh, titled “Growth Forecast Errors and Fiscal Multipliers”, set out how the Washington-based organization made incorrect forecasts about the impact that a rapid fiscal consolidation would have on certain economies, such as Greece’s.
Reports late Monday said that the Greek finance ministry is considering the possibility of proposing a reduction of indirect taxes whose increase has reportedly failed to yield the anticipated results.
