Parliament Budget Office report: 'Social dividend' counter-productive to growth; forecasts 'optimistic'

Friday, 24 November 2017 11:36
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The head of Parliament's independent Budget Office struck again on Thursday during committee-level debate on the tabled 2018 draft budget, saying a "social dividend" - as its billed by the leftist-rightist coalition government - is counter-productive to much-needed economic growth in the country.

Budget Office director Panagiotis Liargovas also charged that the Tsipras government is following "tax-based" and "unfair" austerity policies.

Liargovas' statement, before members of Parliament's budget committee and ahead of a vote by the plenum for next year's state budget, presented the highlights of a report compiled by his office regarding the latter - as mandated by law.

For instance, the report by the Budget Office notes that distribution of such a social spending measure - the "social dividend" - is "understandable". Nevertheless, the 1.4-billion-euro disbursement may also negatively affect growth prospects in the country, given that support for disadvantaged sectors of Greek society is funded "primarily through taxes", the report states.

As presented by Liargovas, the report also clashes with the government's political "story-line" concerning excess cash derived from an over-performance in terms of achieving a primary budget surplus target for 2017, as a percentage of GDP.

Such a surplus, according to Liargovas, who quotes the report on the draft budget for 2018, exceeds the memorandum target. 

Additionally, the Budget Office's report expresses skepticism over targets cited in the budget, such as a forecast increase in private consumption (1.2 percent higher than in 2017), in gross accumulation of fixed capital (11.4 percent higher), and exports (4.6 percent up from 2017), saying these estimates are "optimistic" or "very optimistic".

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