There’s good news and bad news for the Greek economy: a primary surplus will be bigger than expected but the country’s record jobless rate won’t go down markedly for at least four years.
That was the assessment from the finance ministry which said it expects a primary budget surplus of 2.3 percent of Gross Domestic Product (GDP) in 2014, up from a previous prediction of 1.5 percent, and would reach a primary surplus of 5.3 percent in 2018.
Primary surplus figures refer to the budget balance before interest payments, the cost of running cities and towns, social security, state enterprises and some military expenditures, which otherwise would show a deficit.
The figures were released as part of a revised 2015-2018 budget plan that was submitted to Parliament but didn’t reflect that the debt, now at 175 percent of GDP, would still be above 122 percent in the year 2020.
The ministry predicted that unemployment, which hit 27.6 percent, would only fall below 20 percent in 2016, reaching 15.9 percent in 2020, not a favorable outlook for the 1.4 million people out of work.
According to the revised medium term fiscal strategy plans for the 2015-2018 period Greece will see a 2.3% GDP primary surplus and a 0.6% GDP growth rate in 2014.
Deputy Minister of Finances Christos Staikouras presented the revised fiscal strategy in Parliament and noted that the Greek economy will enter a phase of recovery and growth over the next period to end a seven-year recession worsened by harsh austerity measures imposed by the government that have also created deep poverty, although politicians and the rich have prospered.
Staikouras claimed that “Greece has entered a phase of fiscal stability, an achievement that is due to the great sacrifices of the Greek people”.
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