NEWS

OECD sees growth slowdown

Greece’s economic growth is set to slow down after the intense activity linked with the Olympic Games has diminished, but will remain above the eurozone average, the Organization for Economic Cooperation and Development said yesterday. In its twice-yearly economic outlook, the Paris-based organization said Greece’s economy was expected to grow 4 percent in 2004 – down from 4.2 percent last year – before slowing down to 3.5 percent in 2005. «Activity is set to slow somewhat in the period ahead, as Olympic Games-related investment comes to an end, but growth will continue to outpace the euro area average,» the OECD report said. «Easy monetary conditions, in conjunction with a faster implementation of the EU structural fund projects and further declines in unemployment, are expected to maintain domestic demand relatively robust in the post-Olympics period.» The OECD report also confirmed that Greece’s budget deficit had hit the 3 percent mark – the ceiling envisaged by the Stability and Growth Pact which governs the 12-state eurozone that Greece joined in 2001. «This deviation largely reflects overruns in expenditure, including for the Olympic Games, as well as lower-than-programmed EU financing for public investment spending,» the report said. According to government estimates, the original 4.6-billion-euro Olympic budget has been revised up by at least 1 billion euros, while spending on security will rise from 650 million to 1 billion euros. Speaking to his EU counterparts during a meeting in Brussels yesterday, Economy Minister Giorgos Alogoskoufis pledged to lower the deficit to less than 3 percent for 2004, mainly by slashing primary spending.