Greece overshoots its targets, IMF's revised projections a positive development

The IMF’s revised projections for the 2016 primary surplus is a positive development, government spokesman Dimitris Tzanakopoulos on Thursday 20.4 said during a press briefing. Tzanakopoulos said Greece will submit specific proposals and targets to the debate held during the 2017 spring meetings of the World Bank Group and the IMF in Washington D.C. on April 21-23. The government spokesman underlined that the government’s firm position is the lowest possible surpluses so that the Greek economy achieves high growth rates.

Prime Minister Alexis Tsipras held a meeting with key cabinet ministers at Maximos Mansion on Wednesday 19.4 to prepare for the IMF / World Bank Group spring meetings . Finance Minister Euclid Tsakalotos, Economy Minister Dimitri Papadimitriou and Alternate Finance Minister George Chouliarakis will be in Washington DC on Thursday where they will hold preliminary talks on Greece’s debt load, on the sidelines of the meetings. The government’s aim is to have everything concluded by the Eurogroup on May 22 (including the medium-term measures on the debt) so that the road opens for the participation in the ECB quantitative easing programme.

Meanwhile it was announced that in the January-February 2017 period, Greece’s current account improved by €392 million year-on-year and stood at €1.2 billion. This improvement is attributable to increased surpluses in the services balance, the primary income and the secondary income accounts.

Greek News Agenda asked* Secretary General for Fiscal Policy, Franciscos Koutentakis to comment on Greece’s fiscal policy results and current developments:

How do you comment on fiscal forecasts for Greece published by the IMF on Wednesday (19.4)?

The IMF has revised upwards the 2016 fiscal outcome, and this is good news. However, it still attributes it to “temporary factors” but without specifying any such factor. At any rate, this is the second consecutive year that the IMF had to revise upwards their pessimistic projections in light of actual outcomes. It is very likely that the new projections for 2017, 2018, etc will be also revised upwards in the coming months.

The final reading on the primary surplus of 2016 will be published on Friday by Hellenic Statistical Authority (ELSTAT). According to current forecasts the primary surplus of 2016 will be close to 4%, i.e. much stronger than agreed. What could that mean for the Greek economy?

This is the highest primary surplus and actually a total surplus, i.e. including interest payments. This is unprecedented in Greece’s economic history. The main message is that the Greek government has been proven reliable in achieving – actually overshooting – its targets.

Given the different approaches on the debt relief measures between Germany and the IMF, what should the Greek government pursue?

We need to find the appropriate mixture of interest rates and maturities that will maintain the gross financing needs at reasonable levels without imposing any losses to official creditors. The ESM, the IMF and the Public Debt Management Agency have been working hard along these lines during the last year and we are very close to a viable solution that will allow us to return to international markets.

*Interview by Eirini Anastopoulou