The Greek state budget will show a primary surplus of more than 3.5 percent of GDP in this year, from 3.3 percent in 2017, as the country continues its positive fiscal performance in 2018, the Hellenic Fiscal Council said in a report released on Monday.
The report underlined a significant decline in Greek state bond yields – which fell to record-low levels of 3.6 percent in January – as a result of a strengthening credibility of the Greek economy and an increase in GDP by 1.4 pct in 2017, the second year in which Greece’s GDP grew since 2008.
Monday’s report noted that the Greek budget showed higher surpluses this year and stressed that Public Investment Programme revenues grew significantly in the first month of 2018 compared with the same month last year and compared with budget targets.
The Council said that, according to a government policy, borrowing from international capital markets will be aided by a cash buffer, offering more safety and confidence in the period after the end of the memorandum in August.
It noted that investments (gross fixed capital formation) grew by 9.6 pct, while capital investments grew 15.7 pct, having the biggest contribution to GDP growth, while private consumption had an almost zero contribution to GDP growth.
The Council said that a recovery in private consumption was necessary to achieve even higher economic growth rates in the future.