The Kyiv Post welcomes feedback about our new website and we stand ready to fix any problems users might encounter in our test phase. Contact us at: news@kyivpost.com or +38-044-591-3344. Thank you!

Share Tweet Pocket Add to Bookmarks
You're reading: Greece sees its economy contracting by 5.5 percent this year, 2 percent in 2012

ATHENS, Oct 2 (Reuters) - Greece will miss the deficit targets set in its EU/IMF bailout this year and next as it faces worse-than-expected recession, sources said ahead of the adoption by the cabinet of the 2012 draft budget on Sunday.

Greece sees its 2011 budget deficit reaching 8.5 percent of GDP this year, missing a 7.6 percent target, the documents set to be approved by the cabinet show, two sources said.

The budget draft foresees that the deficit will be brought down to 6.8 percent of GDP, above a 6.5 percent target in the bailout that saved Greece from bankruptcy, the sources said.

In the same documents, Greece sees its economy contracting by 5.5 percent this year and 2 percent next year. This is in line with the IMF’s World Economic Outlook, published last month, but much worse than the projections used for the July bailout negotiations, which predicted the country’s economy would return to growth next year.

Athens blames its failure to meet EU/IMF deficit targets on the worse-than-forecast contraction of the economy, while its lenders say failure to push through much-needed structural reforms is also largely to blame.

A deeper-than-expected recession makes it harder for Greece to collect revenues and meet its deficit targets. It also makes the impact of austerity measures such as tax hikes and wage cuts weigh harder on people.

Found a spelling error? Let us know – highlight it and press Ctrl + Enter.

Advertisement

Add comment

Sorry, you must be logged in to post a comment.
More in this section
Attention

Add a picture
Choose file
Add a quote
Attention

Are you sure you want to delete your comment?

Attention

Are you sure you want to delete all user's comments?

Attention

Are you sure you want to unapprove user's comment?

Attention

Are you sure you want to move to spam user's comment?

Attention

Are you sure you want to move to trash user's comment?

Spelling error report

The following text will be sent to our editors: