IMF says Greek economy will grow 6.5% this year

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The International Monetary Fund has announced that the Greek economy will grow 6.5% in 2021. Credit: Simon D. McCourtie, CC BY-NC-ND 2.0

The International Monetary Fund (IMF) announced on Tuesday that the Greek economy envisages a growth rate of 6.5% by the end of 2021.

The IMF detailed the country’s growth for 2021 in its World Economic Outlook report, where it also forecast the Greek economy to grow 4.6% in 2022.

The Fund predicts that the inflation rate will reach 1.3% by the end of the year, then fall back to 0.4% by 2022. They expect the unemployment rate to fall to 15.8% by the end of the year. 2021 and again at 14.6% next year, both years against 16.4% in 2020.

The IMF report comes a week after Greece’s own prediction and offers almost the exact same figure. The country announced that it would reach a growth rate of 6.1% in 2021, while the IMF increased that number to 6.4%.

Greece made its announcement in the provisions of the draft budget plan presented to Parliament on Monday.

Data from the Greek government and the IMF indicate that the Greek economy is expected to recoup all losses suffered in 2020 in the fourth quarter of 2022.

Private consumption is expected to increase by 2.9% this year, after falling 5.2% in 2020 and increasing by 2.9% in 2022. Public consumption is expected to increase by 4.1% in 2021 and fall by 2, 8% in 2022, after increasing by 2.7% in 2020, as the government will gradually lift support measures.

The growth of the economy will be stimulated by investments

Private investment, which fell 0.6% last year, is expected to jump 11.1% this year and soar 23.4% in 2022 thanks to the influx of funds from the Stimulus Fund.

Exports of goods and services fell by 21.7% in 2020, but are expected to increase by 14% this year and 11.1% in 2022. Imports are expected to increase by 6.6% this year and by 8.9 % in 2022, after a drop of 6.8% in 2020. Unemployment is expected to fall to 16% this year and to 14.3% of the workforce in 2022, against 16.3% in 2020.

The draft budget plan noted that the national recovery and resilience plan is expected to add 2.9 percentage points to GDP in 2022, while a gradual return to normal, based on the immunization schedule, will provide economic benefits. additional.

A return to normal is expected to help stabilize fiscal data and support a further recovery in the tourism sector, with travel receipts expected to rise 60% from 2021.

IMF offers highest projection yet for Greece’s economic growth

The IMF’s growth forecast of 6.5% is even higher than the projections of Greek Prime Minister Kyriakos Mitsotakis, who said in September that the Greek economy will grow by 5.9% in 2021.

The faster growth has given the prime minister the fiscal space to announce at the Thessaloniki International Fair a series of tax and spending cuts targeted at young people, small businesses and the middle class.

Small businesses are encouraged to merge with tax breaks and new entrants to the labor market will be subsidized. There was even something for 15-17 year olds who will be vaccinated, in the form of 50 gigabytes of free data for their smartphones.

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