Greece forecasts it will emerge from recession in 2014


Greek vice finance minister Christos Staikouras is upbeat on next year
Greek vice finance minister Christos Staikouras is upbeat on next year

Greece has predicted that it will emerge from its six-year long recession next year, in a sign it may be finally recovering from its debt crisis.

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The Greek government made the forecast in a first draft of its 2014 budget, which predicted 0.6% growth.

“We foresee the end of recession in 2014,” vice finance minister Christos Staikouras said.

Greece will submit a final budget in November.

Greece’s economy has shrunk by 23% since 2008, and it has been dependent on rescue loans from other European Union countries and the International Monetary Fund since 2010.

So far, it has received 240bn euros (£206bn) in loans from the “troika” of international lenders – the European Commission, European Central Bank and the International Monetary Fund.

In return, its economy has been strictly supervised by the troika and the government has been forced to impose drastic cuts, tax rises, and labour market and pension reforms.

The troika will also have to approve Greece’s budget for next year before it can be finalised.

Greece’s budget prediction reflects signs of optimism around the Greek economy.

Tourism is picking up, leading to a rise in seasonal employment. Manufacturing is also showing some signs of recovery, while retail sales continue to decline, but at a slower pace than previously.

However, analysts remain cautious.

The unemployment rate stands at a record of almost 28%, and threats of further job cuts have led to strikes and civil unrest, that economists worry could jeopardise further economic recovery.

Diego Iscaro, principal economist at IHS Global Insight, said he was still expecting the Greek economy to contract between 0.8% and 1% next year.

“To expect the economy to grow next year is slightly optimistic and quite risky. If it performs less well than expected it will have a knock-on effect on taxes and spending and Greece will have to renegotiate its fiscal target,” he added.

Babatunde Akinsola
Babatunde Akinsola
Babatunde Akinsola is aNaija247news' Southwest editor. He's based in Lagos and writes on the Yoruba Nation political issues, news and investigative reports

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