By T. Tsiros
[email protected]
A higher primary budget surplus but a lower growth figure for 2017 will reportedly be inserted in the medium-term fiscal adjustment strategy, which is expected to be submitted to Parliament at the same time as an omnibus bill with the latest austerity measures — for implementation in 2019 and 2020 — that the Greek government promised institutional creditors this week.
According to reports, the primary budget surplus target (as a percentage of GDP) for 2017 will exceed 2 percent, and possibly reach 2.2 to 2.3 percent. The figure listed in the ratified budget for 2017 is 2 percent.
However, beyond the higher tax revenues that the state expects to collect and whatever spending restraint — the necessary “ingredients” for reaching the fiscal target — the forecast for 2017 GDP growth is expected to ease, possibly to 2.5 percent, as opposed to 2.7 percent listed in the year’s budget forecast.
The medium-term program relates to the 2017-2020 period, and in mirroring the course of negotiations for a conclusion of the second review of the Greek program, should have been completed and submitted months ago. The delay is due to the fact that primary budget surplus targets for 2019 and 2020 were not previously finalized.
Nevertheless, the issue of annual primary budget surpluses after 2020 remains unresolved, given that Athens and its institutional creditors have not agreed over how many years the very ambitious 3.5-percent target – as a percentage of GDP – will be in place.
