Greece’s economy is expected to grow by 3.6% this year, according to finance ministry projects

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Greece’s economy is expected to grow 3.6% this year, less than expected, but the rebound will accelerate in 2022 to 6.2%, the finance ministry said.

Greece, which only emerged from a decade-long financial crisis in 2018, saw its economy collapse 8.2% last year amid restrictions aimed at stemming the spread of the coronavirus. COVID-19 pandemic and a collapse in tourism revenues.

The latest forecast, presented at a cabinet meeting by Finance Minister Christos Staikouras, is more in line with the European Commission’s projection in February, which sees the Greek economy grow by 3.5% this year.

It is more than a percentage point below a 4.8% expansion clip forecast in this year’s budget and also below a 4.2% rebound the central bank estimated earlier this month. -this.

The main objectives of the Ministry of Finance, as presented to the cabinet, will be to see Greece exit from enhanced EU surveillance by 2022 and achieve investment grade on its sovereign debt by the first semester 2023.

Greece was downgraded from ‘BB’ to ‘BB’ on Friday by Standard & Poor’s, the one-notch upgrade reflecting hopes for a rapid improvement in the country’s economic and fiscal performance as the effects of the pandemic will subside.

The finance ministry told the cabinet it was aiming for improved public finances from next year and “satisfactory” primary budget surpluses from 2023.

Greece’s public finances have been strained by falling revenues and much higher spending to mitigate the economic fallout from the pandemic.

Last year it reported a primary budget deficit of 6.7% of gross domestic product, the first primary budget deficit after consecutive years of surpluses.

The general government budget deficit reached 9.7% of economic output last year after a surplus of 1.1% in 2019.
Source: Reuters (Report by George Georgiopoulos edited by Gareth Jones)

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