Greece’s central bank forecasts the country will post a primary surplus of 1.3 per cent of gross domestic product (GDP) this year, its governor Yannis Stournaras told a Greek newspaper.
Under its third international bailout signed last summer, Greece aims at a primary surplus – which excludes debt servicing costs – of 0.5 per cent of GDP this year. The bank had forecast earlier this month the country would achieve a surplus of 0.9 per cent this year.
“Fiscal hurdles for 2016 have been overcome and the forecast by the (central) Bank of Greece is that the year will close with a primary surplus of 1.3 per cent of GDP,” Stournaras was quoted as saying by Sunday’s To Vima newspaper.
He said that, therefore, Greece has fiscal room and will not need to activate a contingency mechanism of across-the-board spending cuts that was agreed with its international lenders if the country missed its fiscal targets.
Mr. Stournaras also added that tourism, reforms and privatizations are key to bringing Greece back into the game, expressing his optimism that faith is being restored in the Greek economy.
Greece almost toppled out of the euro zone in 2015 and has been cutting spending and raising taxes since 2010 to put its finances back on track. Stournaras said that if the country wanted to put an end to austerity, it should make headway on privatisations and agreed reforms.
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