Greece's fiscal deficit is expected to reach 2.9 pct of GDP this year and to fall further in 2008 and 2009 to 1.8 percent, below the Maastricht Treaty's limit, the European Commission announced on Friday.

In its autumn forecasts for the Greek economy, the EU's executive arm, said it expected positive developments to continue in the Greek labour market, with unemployment falling steadily over the next two years to reach 7.5 pct of the workforce in 2009.

Greek economic growth will reach 4.1 pct this year and was expected to remain strong and above the EU average rate in the next two years, with 3.8 pct in 2008 and 3.7 pct in 2009. Economic growth in the Eurozone is projected at 2.6 pct in 2007, 2.2 pct in 2008 and 2.1 pct in 2009, while in the EU-27, economic growth is expected to reach 2.9 pct this year, 2.4 pct in 2008 and 2.4 pct in 2009.

The Commission also said it expected Greece's public debt to fall to 93.7 pct of GDP this year and to continue falling to 91.1 pct in 2008 and 88.8 pct in 2009. The public debt was 95.3 pct of GDP in 2006.

Greek inflation is projected to fall to 2.8 pct this year, from 3.3 pct in 2006, rising to 3.1 pct in 2008 and 2009, while unemployment is projected to reach 8.4 pct this year, from 8.9 pct in 2006, falling to 7.9 pct in 2008 and 7.5 pct in 2009.

The European Commission noted that it based its autumn forecasts on a Gross Domestic Product revised upwards by 9.6 percent.

The report said economic growth in Greece exceeded 4.0 pct in the first half of the year and said it expected domestic demand to remain strong in the second half of 2007, although it noted that higher imports will have a negative impact on the country's GDP. The Commission expects economic growth to reach 4.0 pct this year, slightly lower compared with 2006, but significantly higher compared with the Eurozone average.

Investment activity is showing signs of easing in Greece, after a strong performance in 2006, with public consumption still rising. The Commission said it expects Greek exports to grow by more than 6.0 pct this year and imports to rise as well, but at a slower pace compared with 2006.

The Commission forecasts a 3.8-pct growth rate in 2008 and a 3.7 pct rate in 2009, reflecting mainly strong domestic demand and noted that the possibility of higher interest rates and uncertainty in financial markets, combined with moderate wage increases, could lead to a further slowing down of private consumption, projected to remain above 3.0 pct by 2009.

Alogoskoufis reaction
“It is very important that the European Commission acknow-ledges efforts made by Greece to further cut its fiscal deficit and to achieve fiscal consolidation,” Economy and Finance Minister George Alogoskoufis said on Friday, commenting on the publication of the very positive report.

The Greek minister, according to an ANA dispatch from New York City, said it was equally significant that the Commission acknowledged the strong growth potential of the Greek economy, which will result in higher employment and lower unemployment in the next two years.

“Greek economic growth, according the Commission’s autumn forecasts, will continue to be stronger than Eurozone’s average growth rate in the 2008-2009 period, based on strong growth of investments and exports,” Alogoskoufis said.
He noted that results so far of the government’s reform programme and economic policy were positive, although the government will not rest on these results.

“We have a long way to go forward to cut definitely cut our fiscal deficit,” he said.

FinMin outlines Greek economy's progress in interview on Bloomberg TV, radio
National economy and finance minister George Alogoskoufis outlined the progress noted by the Greek economy in recent years, having reduced its fiscal deficit to under 3 percentage points, while at the same time maintaining high growth rates and a reduction in unemployment, in an interview on Thursday (NY time) with the Bloomberg television and radio stations, in the context of a visit to New York for the 9th annual Capital Link international investment conference on investment and business opportunities in Greece.

Replying to a question, Alogoskoufis said that there was no particular concern for the Greek and the European economies due to the repercussions of the uncertainty prevailing in the international economy and the situation in the US economy, given the strong foundations on which those economies are founded and their robust foundational sizes.

Alogoskoufis noted that the wider region of the Balkans can comprise the next international economic miracle, stressing that the region presented significant business opportunities.

The Greek minister also met with US former secretary of the treasury Robert Reuben, who is now chairman of the board of Citigroup, the world's largest financial organisation, and with Trump group president Donald Trump.

Alogoskoufis and deputy finance minister Yannis Papathanasiou also called on Archbishop Demetrios of America.

Alogoskoufis said after the meeting that they discussed a variety of topics, including how the Greek State can help the Church-sponsored camps in Greece for children of the Greek American community, and particularly how to boost the existing camps such as that in Ileia prefecture, as well as ways of maintaining the strong bonds between Greece and the overseas Greeks.

The Archbishop expressed absolute satisfaction with the discussion with Alogoskoufis.

Source: Athens News Agency

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