Negotiations between the Greek government and creditors' top auditors over fiscal targets and figures for 2018 and will begin in the second half of October, by all accounts after the tabling of the draft budget for next year.
By T. Tsiros
[email protected]
Negotiations between the Greek government and creditors' top auditors over fiscal targets and figures for 2018 and will begin in the second half of October, by all accounts after the tabling of the draft budget for next year.
A likely date for the tabling the 2018 draft budget in Parliament is Oct. 2, with nary a change from the Medium Term Fiscal Strategy (MTFS), which was ratified by Parliament last June, expected.
A vote by the Parliament's plenum is expected in December, possibly before a conclusion of the third review of the ongoing Greek program - the third consecutive bailout for the country.
Before the dozens of "prior actions" that the current Tsipras government must implement - and prove their implementation - Athens and creditors are expected to focus on the all-important growth rate forecast for 2018, as this figure is linked with several important economic indices, including revenues.
Among others, creditors may point out that the revenue target for 2018 is threatened by lower consumption, given that the total figure for collected indirect taxes - mostly VAT - is linked to the latter.
Another portion of the revenues collected in 2017 will not be repeated in 2018, while the course of income tax collection will also come under scrutiny.
The specter hanging over the embattled leftist-rightist coalition government in Athens is the possibility that creditors will detect a looming fiscal gap arise that must be covered by new austerity measures. Such a gloomy development would merely add to the faltering coalition government's woes.
Whether or not new austerity measures will be demanded by creditors will be cleared up by the end of October, given that a much more precise picture emerges on the execution of the 2017 budget.
Finance ministry officials and top government cadres are "guardedly optimistic" that the third quarter will deliver robust economic figures to guarantee a revised goal of 1.8-percent GDP growth in 2017, as foreseen in the MTFS. Should the target be exceeded by 0.2 (2 percent GDP growth) then the target for 2018 will justify an upwards revision.
Based on the MTFS, the target for Greek economic growth in 2018 is 2.4 percent on an annual basis.