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New Greek three-year fiscal plan forecasts rapid recovery

30 April 2014, 15:48 CET
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(ATHENS) - Greece on Wednesday presented a three-year fiscal plan forecasting further improvement in the underlying budget surplus, a major fall in unemployment and real growth of 3.2 percent by 2018.

"The main target of the plan is to keep Greece in high primary surplus for a long period to come," the ministry said.

The primary surplus is the budget balance without interest, support for banks and other payments.

The medium-term framework of fiscal strategy for 2015 to 2018 foresees across-the-board recovery in economic indices.

However, the ministry notes that political upheaval could adversely affect the forecasts.

Early elections are likely to be held in Greece by early 2015 when the term of President Karolos Papoulias ends.

The primary surplus will be 2.3 percent of output in 2014 and 5.3 percent by 2018.

The surplus was 0.8 percent in 2013, a first in over a decade.

The unemployment rate will fall from 24.5 percent in 2014 to 15.9 percent in 2018.

After a six-year recession, real output will rise from 0.6 percent this year to 3.7 percent in 2016 and 3.2 percent in 2018.

The pace of privatisation is to accelerate, with 1.5 billion euros in proceeds in 2014, 2.2 billion in 2015, 3.2 billion in 2016, 2.8 billion in 2017 and nearly 3.0 billion in 2018.

The Greek public debt is to be reduced from nearly 317 billion euros this year to 301.8 billion in 2018, or 139.1 percent of output.

Civil service staff cuts will continue, but the number of new hirings will progressively rise.

There will be over 21,000 layoffs and voluntary departures this year and some 14,000 hirings. In 2018, there will be 15,300 layoffs and 17,600 hirings.

The main opposition Syriza party criticised the reduction of the health ministry budget by some 300 million euros by 2018. The education ministry budget will also be cut by some 700 million euros.

"Not only is the humanitarian crisis (in Greece) not being addressed, but there are no plans to compensate those who bore the brunt of the sacrifice," shadow finance minister Euclid Tsakalotos said in a statement.

The fiscal plan is to be submitted to a vote in parliament on May 9.


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