untitled design

The first ‘scan’ of the IMF in the economy after its repayment

Of Tasos Dasopoulos

Optimistic short-term and pessimistic medium-term, both for the debt and for the growth rate, the IMF is expected in the data that will start to be published from today, in the context of the spring meeting of the Fund and the World Bank

The Fund has already given its assessment of the Greek economy through its regular report (based on Article IV of its statutes) on the Greek economy, at the end of March.

The IMF forecasts are expected to be repeated in the reports that are expected to be announced today and tomorrow on the economic outlook of the IMF member states (World Economic Outlook) and their fiscal course (Fiscal Monitor).

According to the IMF, despite the current crisis posed by high inflation and the ongoing war in Ukraine, the growth of the Greek economy will show a limited slowdown from 4.5% projected in the 2022 budget to 3.5%.

However, in the medium term, despite the fact that the IMF recognizes the positive impact of the Recovery Fund resources until 2026, it predicts that after 2022, growth will begin to gradually slow down from 2023, to reach 1.9% in the medium term. , compared to a medium-term forecast for growth of 1.5% in previous years.

This is at a time when, in his statements, the Minister of Finance, Mr. Christos Staikouras, has said that in the Stability and Development Program (PSA) 2022-2025, which will be sent from Athens to Brussels, at the end of the month, the forecast for growth for this year will be just over 3%, but will fall short of the IMF forecast. However, in the medium term, YPOIK expects growth means that will exceed 3%.

In terms of inflation, the IMF appears even more optimistic than the Ministry of Finance. It predicts that the increase in inflation will not exceed 4.5% this year, with the prospect of falling significantly in 2023 to 1.3% – 1.5% in 2023. On the contrary, the Ministry of Finance is preparing for a significant inflation review for this year, from 0.8% projected in the budget to 5.5% -6%, ie significantly higher than what the IMF forecasts.

The debt

In terms of debt, the IMF has remained stable for five years. In the short term, it forecasts a steady downward trend in debt as a percentage of GDP, considering debt sustainable. In the medium and long term, however, it continues to express doubts about how long the debt will remain sustainable, for two reasons: The first is the resilience of the Greek economy, to produce for many years, high primary surpluses and the second, the difficulty it adds in debt reduction, the prospect of raising interest rates by the ECB in the near future and indeed, with unknown duration.

This year’s forecasts are the first made in the capacity of the IMF as another international organization, which monitors the course of the Greek economy and not as a public lender. On the 5th of the month, Greece repaid the remaining 1.86 billion of the Fund’s loans taken by Greece, during the first and second memoranda.

At the same time, our country returned to the position of regular member of the Fund, completing with a delay of 10 years the contribution of 1 billion euros, in the new financing mechanism of the Fund.

Source: Capital

You may also like

Get the latest

Stay Informed: Get the Latest Updates and Insights

 

Most popular