Greek economy to contract 2%
By Derek Gatopoulos |
March 24, 2010, Wednesday
|
Print Edition
Print Edition
GREECE'S economy will shrink by 2 percent in 2010 - the same as in 2009 and worse than the government predicts - due to the painful impact of government spending cuts, the Bank of Greece forecast on Monday.
In an annual report, the central bank approved of the government's austerity measures worth 4.8 billion euros (US$6.5 billion) aimed at controlling the high budget deficit, but said they would prolong an already deep recession.
Its forecast compares with the center-left government's prediction for a contraction of 1.2 to 1.7 percent this year, while the EU Commission projects a 2.25 percent contraction.
However, Finance Minister George Papaconstantinou remained upbeat on the prospect of recovery.
"The Greek economy in 2010 will refute the pessimistic forecasts on growth," he told parliament late Monday. "As long as the deficit is reduced and as long as the measures we take to support the economy ... are successful, recovery will be dynamic, and that will be reflected in the data as the year advances."
But he stressed that, to achieve growth, "we must first be able to borrow, in order to survive."
Greece says it needs Europe's "political support" to lower borrowing rates.
In an annual report, the central bank approved of the government's austerity measures worth 4.8 billion euros (US$6.5 billion) aimed at controlling the high budget deficit, but said they would prolong an already deep recession.
Its forecast compares with the center-left government's prediction for a contraction of 1.2 to 1.7 percent this year, while the EU Commission projects a 2.25 percent contraction.
However, Finance Minister George Papaconstantinou remained upbeat on the prospect of recovery.
"The Greek economy in 2010 will refute the pessimistic forecasts on growth," he told parliament late Monday. "As long as the deficit is reduced and as long as the measures we take to support the economy ... are successful, recovery will be dynamic, and that will be reflected in the data as the year advances."
But he stressed that, to achieve growth, "we must first be able to borrow, in order to survive."
Greece says it needs Europe's "political support" to lower borrowing rates.
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