Mon, May 15, 2017 - Page 14 News List

Greece cuts growth estimate for this year to 1.8 percent

Reuters, ATHENS

Greece cut its growth forecast for this year to 1.8 percent from 2.7 percent, according to a mid-term budget plan unveiled late on Saturday, driven by uncertainty caused by delays in concluding the latest review of bailout reforms.

Greece and its foreign creditors — the EU and IMF — reached a deal on reforms earlier this month after six months of tense negotiations but the wrangling hurt economic activity.

The Greek central bank governor had warned the delays could hobble economic recovery.

The 2018-to-2021 plan was submitted to parliament along with the reform deal which lawmakers need to approve.

It forecasts growth of 2.4 percent next year and 2.6 percent in 2019.

The projections are lower than those of the EU Commission, which also cut its growth estimates last week to 2.1 percent this year from 2.7 percent forecast three months ago.

GDP GROWTH

GDP growth was also set to shrink to 2.5 percent next year from the previously estimated 3.1 percent, the commission said.

The government hopes that legislating the new measures on Friday would allow its eurozone partners to approve the deal when they meet on Monday next week and release a new tranche of bailout funds.

It also wants the ministers to sign off on the review to qualify for inclusion in the European Central Bank’s quantitative easing program and return to bond markets after three years of isolation.

Greek government borrowing costs last week hit their lowest level in more than five years.

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