Greece will return to primary surpluses in 2023, according to the IMF

The IMF said in its Fiscal Monitor report released on Wednesday that Greece will return to primary surpluses in 2023 and will continue to reduce its public debt.

The Fund forecasts that the general government's primary surplus will be 0.9% of GDP in 2023, rising to 2% in 2027, from 1.8% this year and 5.5% in 2021.

According to the analysis, the general government balance, including debt capital payments, will show a deficit of 1.9% of GDP in 2023, down from 4.4% this year and declining to 0.7% in 2027.

Government revenue is predicted to shrink from 47.6% of GDP this year to 45.9% in 2023 and 43.6% in 2027, while government spending is expected to reduce from 52% this year to 47.8% in 2023 and 44.3% in 2027.

The general government debt is predicted to reduce from 199.4% of GDP in 2021 to 177.6% this year, 169.8% in 2023, and 149.9% in 2027, from 199.4% in 2021 to 149.9% in 2027.

The IMF expects Greece to maintain its current growth trajectory in 2023.

With more than a third of the world economy predicted to enter recession this year or in 2023, the IMF forecasts that Greece's GDP will remain positive next year.

The Fund expects GDP to expand by 5.2% this year, compared to the government's prediction of 5.3%, but also to its own forecast in June (3.5%) in the context of the Article IV report, as primarily tourism boosted the figures.

However, it anticipates that annual growth would be limited to 0.7% in the fourth quarter.

Its prognosis for Greece in 2023 has been reduced to 1.8%, compared to a government estimate of 2.1% and its earlier forecast of 2.6%.

It is estimated that the pace will have accelerated to 7.5% in the fourth quarter of 2023, bringing it to the average of 1.8% in 2023, with the first three quarters of the year on the verge of stagnation, if not showing a negative sign at some time.

According to the Greek government's draught budget for 2023, the Greek economy would develop at a slower pace in 2023 after a robust resurgence this year, fuelled mostly by the tourism sector. The country's economic output is expected to grow by 2.1% next year, up from 5.3% last year.

After the draught plan was tabled in Parliament, Finance Minister Christos Staikouras and Alternate Minister Theodoros Skylakakis stated that the 2023 budget was written in an environment of significant uncertainty about global geopolitical developments.

The new budget attempts to address issues such as the energy crisis, inflationary pressures on individuals and businesses, the health crisis, and rising defence spending.

At the same time, it is intended to maintain fiscal balance and satisfy long-term growth targets while also supporting a wide variety of changes, according to the ministers.

By fLEXI tEAM