The International Monetary Fund foresees a deteriorating Greek economy, at least for the following year.
In its World Economic Outlook report for October 2015 the IMF predicts that by the end of 2015 Greek GDP will have fallen by 2.3%, while in 2016 the country will have a recession of a 1.4% level. At the same time the fund estimates that by the end of 2017 Greece’s economy will grow by 2.7%.
The report notes that while Eurozone’s recovery will continue modestly in the 2015 – 2016 period, Greece is unlikely to have the same fate.
“The outlook for Greece is markedly more difficult following the protracted period of uncertainty earlier in the year,” the report warns and adds “In advanced economies, contagion risks from Greece related events to other euro area economies, while lower than earlier in the year, remain a concern, as do risks from protracted weak demand and low inflation,” the IMF asserts.
The 2017 recovery will have already begun in 2016, according to the report. The fourth quarter predictions are markedly different between 2015 and 2016 as the Greek GDP in this year’s final quarter will drop by an additional 5.4% while next year’s third quarter will show a 3% GDP increase.
“The fiscal projections for 2015 and the medium term are IMF staff estimates based on the fiscal package included in the European Stability Mechanism program agreed on between Greece and its European partners and on information available as of August 12, 2015,” the IMF clarifies.
The IMF’s participation in the three year 86 billion euro Greek bailout still remains uncertain. The fund’s officials have claimed that this hinges on whether there is some debt relief for Greece and whether the Greek government demonstrates that it is committed to the program by implementing the prescribed reforms.