IMF slashes medium-term Greek growth estimate, experts point to reforms gap, debt sustainability

Source: Xinhua| 2018-10-09 21:08:17|Editor: Yurou
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ATHENS, Oct. 9 (Xinhua) -- The International Monetary Fund (IMF) has significantly reduced its medium-term outlook for Greece's economic growth, while bringing its estimate for next year broadly in line with that of Athens, in the latest update of its World Economic Outlook published on Tuesday.

The IMF projects in its report that the Greek economy will expand by 2.4 percent in 2019, revising its estimate six months ago of a 1.8 percent growth.

This is much closer to the official forecast of the Greek government for a 2.5 percent expansion included in the first draft of the 2019 budget tabled in parliament last week. The European Commission expects the Greek economy to grow 2.3 percent next year.

However the IMF has revised downward its forecast of Greek growth for 2023 from 1.9 percent in its report issued last April to just 1.2 percent, only above Italy in the eurozone that year.

"The Fund may see that reforms are not proceeding in Greece as they should have and is reflecting this in its long-term projections," Giorgos Stratopoulos, an analyst at the E-Kyklos think tank in Athens, told Xinhua.

The IMF has been one of Greece's main creditors in the first couple of bailout programs and has long insisted that the national debt is not sustainable in the long run without any significant intervention.

"This downward revision is associated to the medium-to-long-term sustainability of the Greek debt," argued University of Athens Associate Professor Dimitris Kenourgios.

"The Fund has not backtracked on its opinion; in the short-term it has shown a compromise, but expects more measures to ease the national debt," he told Xinhua.

"Furthermore, Greece has so far failed to tap the money markets, and looks like being a long way from doing so; this adds to the IMF's long-term view of the Greek economy," Kenourgios pointed out.