IMF Mentions the Lack of Greece for More Fiscal Target

On Monday, the International Monetary Fund (IMF) indicates that by decreasing Greece’s fiscal targets, it would make way for support at the country’s economic and social recovery.

According to the fund’s statement, in 2020, the IMF acclaims that “the government and European partners build consensus around a lower primary balance path.”

Moreover, “this is with the given ample economic slack and critical unmet social spending and investment needs.”

After the conclusion of the Article IV mission in Athens, expressions regarding the statement occurred.

Meanwhile, Greece must attain a primary surplus of 3.5% of gross domestic output. The country should reach that excess every year, until 2022 under the standings of a deal with its European creditors.

In July, the new Prime Minister, Kyriakos Mitsotakis, already took over. He has also made a phone call regarding the targets of “a relic of the past.”

In addition, Mitsotakis is now trying to persuade his country’s associates to reduce them.

The reduction plan will take place starting in the year 2021.

Discussions of Primary Surplus Target

In a news report last Friday, IMF mission chief for Greece, Peter Dolman indicated that Greece is having a get together with its primary surplus target “more or less,” for 2019.

On the flip side, there is still a gap about to happen in the year 2020. Dolman’s concern is “what the quality of the measures taken to fill this gap will be,” he said.

Moreover, the IMF’s mission chief stated that cutting public investments is not a quality measure.

He also said that the country should develop its sales-tax compliance and broaden its tax base. The improvement is to create more fiscal space for social policies and tax cuts.

Meanwhile, IMF said in a statement, “it will take another decade and a half for real per capita incomes to reach pre-crisis levels.”

Data believes that the fund calculations will be around 2%. This is in reference to Greece’s growth rate for both 2019 and 2020.

IMF also added, the new government “should use its political mandate with improving investor sentiment to deploy a full range of policy tools and overcome long-standing vested interests,” it said.

The statement was concerning on how to support the growth of the country.