IMF: Improved primary budget surplus forecasts for Greece; worsening debt-to-GDP ratios

The IMF on Wednesday released an improved forecast for Greece’s primary budget surplus performances in 2017 and 2018 (as a percentage of GDP), although accompanied by a worsening debt-to-GDP ratio.

The forecasts were included in the Fund’s Fiscal Monitor report.

Specifically, IMF said the still bailout-dependent country is forecast to reach a 3.7-percent primary budget surplus in 2017, a significant improvement from the Fund’s 1.7-percent forecast last autumn.

The forecast comes days before Greece’s independent statistics authority is set to release a first official estimate for the course of the fiscal target for 2017 – a target that Greece must exceed, as per a memorandum-mandated obligation.

In terms of the closely watched debt-to-GDP ratio, the IMF pointed to lower than previously expected growth in the recession battered country, until 2019, as increasing the figure.

The debt-to-GDP ratio is expected to top off in 2018 at 191.3 percent of GDP.

Specifically, the IMF forecasts for Greece are:

Α. Primary surplus:

• 2017:   3.7% (up from 1.7% in October 2017)
• 2018:   2.9% (up from 2.2%  in October 2017)
• 2019-2022: 3.5%  (this forecast is the same as announced last October)
• 2023: 1.5% (the first time a forecast has been made by the IMF for)

Β. Debt (as a percentage of GDP)

• 2017: 181.9% (from 180.2%, the previous forecast from October 2017)  
• 2018: 191.3% (up from 184.5%)
• 2019: 181.8% (up from 177.9%)
• 2020: 177% (up from 171.4%)
• 2021: 172.2% (up from 165.4%)
• 2022: 168.7% (up from 161.2%)
• 2023:165.1%