The impact on the Greek economy from turmoil in international financial markets and rising oil prices, which affect purchasing power throughout the world, will be limited because reforms taken by the government in previous years are now maturing, Economy and Finance Minister George Alogoskoufis said on Thursday.

Speaking to reporters to present the country's updated Stability and Growth Programme 2007-2010, Alogoskoufis said the impact on the economy will be limited because of the existence of a wide-ranging Public Investments Programme (worth 9.3 billion euros), high private investments totalling 8.0 billion euros, the launch of a 4th Community Support Framework package (worth 24.3 billion euros) and the launch of a series of private/public joint ventures worth three billion euros.

The Greek minister underlined that strong growth in south-eastern Europe will boost demand and noted that 2008 will be a year of implementing reforms aimed at reducing deficits and combating tax evasion.

The government aims to reduce its fiscal deficit from an estimated 1.6 pct of GDP In 2008 to 0.8 pct in 2009 and to presenting a balanced budget in 2010. Economic growth is also expected to be around 4.0 pct in the next three years, while unemployment is projected to drop to 6.0 pct of the workforce by 2010.

Greek economic growth was based mainly on exports and private investments in the past years. "The Greek economy has strong foundations," the minister said.
Finance Deputy Minister Nikos Legas said the fiscal deficit will remain below 3 percent in 2007, while Economy Deputy Minister Yiannis Papathanasiou said the government's aim was not to lose even one euro from a 3rd Community Support Framework package.

Finance Deputy Minister Antonis Bezas said the ministry was launching a third phase of a tax reform programme aimed to combat tax evasion in the country.

Greece's updated Stability and Growth Program 2007-2010 is based on the scenario that global oil prices will stabilize and that the impact from a turmoil in financial markets won't be widely spread.

The country's real Gross Domestic Product is projected to grow by 4.0 pct annually during the three-year period, despite high oil prices and a strong euro currency rate.

Private consumption is expected to continue its strong advance (an average 3.4 pct during the three-year period), while real wages are expected to grow by an average of 2.4 pct over the same period. Employment is expected to grow by an average of 1.8 pct and the unemployment rate to fall to 6.0 pct in 2010.

The program also projects strong Greek exports and a slight reduction of the country's current accounts deficit, while inflation is expected to remain under control.

Source: Athens News Agency

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