Stournaras: IMF’s Fiscal Forecasts Raise Many Questions

Bank of Greece governor Yiannis Stournaras said in a letter responding to the IMF’s report published on Monday — which proposed among other measures, broadening the personal income tax base and rationalizing pension spending as well as reducing non-performing loans (NPLs) — the IMF’s argument that banks will need an extra 10 billion euros in capital is without explanation.

“Given that the general government’s primary surplus may reach 2 percent of GDP, versus a target of 0.5 percent of GDP, the fund’s fiscal forecasts raise many questions,” Stournaras says, adding the IMF is also very pessimistic concerning future economic developments, including a need to recapitalize banks again.

Additionally, according to the BoG, the achievement of medium-term targets for NPLs would further increase the capital adequacy ratio.

Source: ANA-MPA


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