Boosting employment high on agenda of talks between Athens, creditors; major factor in growth 'calculus'

Monday, 16 October 2017 12:40
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Employment figures in recession-battered Greece over the next 15 months will have - as widely expected - a decisive impact on the course of the country's economic recovery, private consumption and the course of the state budget's execution for 2017, as well as in meeting social security funds' revenue targets.

Nevertheless, the Greek side's optimistic forecasts have recently clashed with the IMF's more cautious predictions, ones included in a very recent revision of the Fund's projections for the Greek program and the country's economic outlook. The Commission's revised forecasts for Greek employment will come in early November.

In the coming period, moreover, the issue of employment will be on the agenda of talks between the Greek side and creditors' top auditors this month - negotiations aimed at concluding the third review of the ongoing bailout.

The Tsipras government's forecasts that unemployment in the still bailout-dependent country will ease to 20.2 percent this year, or 22 percent based on a survey of the active population sample. For 2018, the government foresees an unemployment rate of 19 percent, on a national basis.

Conversely, the IMF revised its forecasts for Greek unemployment, issuing a slightly more negative figure, compared to its last report in April 2017, which came on the sidelines of its spring meetings in Washington D.C. The IMF said unemployment in Greece will stand at 22.3 percent in 2017, up from 21.9 percent that it forecast six months ago.

In terms of 2018, the IMF's new forecast was improved, putting the jobless rate at 20.7 percent, marginally better than the 21 percent forecast issued previously.

In a breakdown of the unemployment figures for 2016 and 2017, part-time work accounted for the majority of new jobs created in the fourth quarter of 2016 and the first quarter of this year, the first time this trend was witnessed in Greece since 2014.

As far as long-term unemployment is concerned, this category showed signs of a gradual decrease, in absolute numbers, although still trailing the overall decrease in unemployment in the country in the second quarter of 2017. As a result, the percentage of long-term unemployed marginally increased in comparison with the overall figure in the first half of 2017 - 71.8 percent, as opposed to 71.2 percent in the corresponding period of 2016.

In focusing on Greece's service and retail sector, the latter absorbed 72.4 percent of employed people in the country in the first half of 2017.

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