OECD Predicts Greece’s Debt Will be 157 Percent of GDP by 2020



Samaras_GouriaThe Greek Minister of Finance, Yiannis Stournaras was stunned by the findings of the Organisation for Economic Co-operation and Development’s report concerning the course of the Greek economy. Besides the prediction of further recession (0.4 percent) during 2014 — a prediction that caused a public debate between Greece’s side and OECD’s secretary general —  the economists of OECD also predicted that by 2020 Greece’s debt pile will stand at the astronomical levels of 157 percent of GDP in contrast to 124 percent that Troika is expecting.

The basic acceptance of this shocking prediction is that the Greek economy will suffer from a low-level inflation or better from deflation, meaning that GDP will stand at lower levels from those predicted from the Sustainability Report. Consequently, those who are in favor of a new “haircut” of Greece’s debt, now insist that it is the only way to help Greece’s economy strive.

In particular, OECD for 2020, predicts a negative inflation of 0.6 percent that will result in a real GDP of 2.1 percent instead of the 2.9 percent as it was initially predicted by Troika. These predictions of OECD are based on the instability of the International Market which does not allow a big increase in investments.

This scenario “incorporates” the activation of automatic stabilizers. Thus, the rhythm of fiscal adjustment will drop at a lower level of development and as a result it is estimated that the goal of a 4.5 percent primary surplus will be achieved no earlier than 2018.

From the first lines of OECD’s report, it is mentioned that Greece’s side must fully adopt all the scheduled reforms, as it is the only way for Greece to recover from the recession.  However, if the application of the reforms is not fruitful, a message will be sent to Greece’s partners, that a new economic package would be necessary in order for the Greek economy to flow.

 

Angel Gurria: “There is Life After Debt”

Earlier today, Angel Gurria, the secretary-general of the OECD, visited Greece to meet with the Greek Prime Minister, Antonis Samaras, at the Maximos Mansion and to present the organisation’s report on the country’s handling for the ongoing crisis.

The head of the OECD congratulated Antonis Samaras and praised the country’s efforts to find its way out of the crisis pointing out that Greece comes first on a list that concerns structural reforms.

Before his meeting with the Greek premier, Mr. Gurria also met with PASOK’s chief and Deputy Prime Minister, Evangelos Venizelos. After their conversation over Greece’s “impressive adjustment program” and the “spectacular reversal in the balance of payments” as Mr. Gurria mentioned, he also added that “there is life after debt” commenting on the country’s primary surplus. Meanwhile Mr. Venizelos, when talking to the press, stated that the OECD report points out the fact that the Greek debt is sustainable.

Moreover, Mr. Gurria’s program for the day included meetings with Minister of Finance, Yiannis Stournaras, and the Minister of Development, Costos Hatzidakis, as well as a speech that he is expected to deliver at the Constantinos Karamanlis Institute for Democracy.


14 COMMENTS

  1. The Greeks debt as it stands now is 180% of its GDP.By 2020 it will be probably even more with Greece taking out continuous loans from the EZ.I don’t know what Stournaras is “stunned” about.

  2. The author of the article added the word “stunned”. This is Greek Reporter after all. The unprofessional leftist “journalists” here constantly pepper stories with invented “facts” and unflattering adjectives and analogies to demonize their political opponents (much like you behave actually). They fail to understand journalism 101. There is a difference between expressing one’s personal political views and objective reporting of facts.

  3. Are the Greeks up till the neck in debt? Did they cook the ledger books to gain entry in the euro?Did they recklessly spent the other country money and then declared Default ?Did they promised reforms in return for cash and reneged on their promises ? Do they constantly engage in tax avoidance?How is all this “demonizing”?I am simply stating the FACTS.

  4. Is anybody with even a tiny shred of intelligence surprised at all by the findings of the OECD report? I would call the OECD figure of Greece’s debt being 157% of Greece’s GDP a conservative figure. The sleazy New Democracy – PASOK governing coalition will be punished severely at the May 2014 Greek municipal elections and EU parliamentary elections. The results of these elections will cause this corrupt coalition government to lose all legitimacy. SYRIZA & Golden Dawn will be big winners in May 2014.

  5. This Greek Reporter newspaper has become a joke and another TOOL for this morally bankrup and corrupt Gov’t of Thieves and Liars wriitng false news items that only encourages more of their blind destruction of Greece and Society!
    The EU with its appointed Technocrats are ruling Europe in a DICTATORSHIP!

  6. You live in fantasy land. Your party likely won’t even be on the ballet. Its leader is in jail. You don’t even realize Golden Dawn and Syriza supports anti-government rants sound nearly identical.

  7. Except many of the alleged “facts” you say on this website are gibberish (like your twisted “fact” Greeks are “Egyptian gypsies”). You are obviously just an extreme nationalist here to demonize Greeks. Anyone that “agrees” with you is basically aligning themselves with a racist.

  8. Out of curiosity… you claim to support Hellenism right? Are you for equal rights for homosexuals then? The Nazis criminalized homosexuals. Ancient hellenes on the other hand tolerated homosexuality.

    Show the actual Greeks here where your priorities are on the issue of the rights of homosexuals MSMiles. Foreign Nazism or Hellenism?

  9. Japan’s debt to GDP is 220% going to 250%.

    The debt to GDP is only relevant when you have market financing because the more debt you have the more it’s going to cost you.

    Greece’s situation is very different. Its cost of debt is 1.9% and all you have to do to make the debt viable is to obtain 1% cost of debt or lower.

    Already Greece receives some ECB loans at 0.7%. The IMF loans are costing Greece close to 4%.

    So, if all Greece’s current loans were consolidated and received below 1% interest then Greece is good to go. The size of debt is not the issue. It’s what you pay on the debt that matters.