MF Fiscal Monitor predicts higher primary surpluses in Greece

Greece is forecast to maintain and increase a general government primary surplus in the coming years, according to the International Monetary Fund’s (IMF) Fiscal Monitor report on global fiscal developments released on Wednesday. The Greek general government primary balance is forecast to increase a surplus of 0.1% of GDP in 2022 to 1.0 pct of GDP in 2023 and 2% of GDP in 2024-2025, and then to 2.2% of GDP in subsequent years up until 2028, with a further reduction of Greece’s public debt.

The general government overall balance, which includes interest rates payments for public debt, is expected to show a declining deficit, which is seen dropping from 2.3% of GDP in 2022 to 1.6% of GDP in 2023 before dropping to 0.8% of GDP in 2024.

This is forecast to be the result of a greater reduction in public spending than the decline in public revenues.

Public spending is forecast to decline as a percentage of GDP, from 52.5% in 2022 to 48.9% in 2023 and then to 47.1% in 2024, while public revenues are seen declining to 50.2% of GDP to 47.3% of GDP and 46.4% of GDP in the same years, respectively.

The public debt is forecast to decline from 178.1% of GDP in 2022 to 168% of GDP in 2023 and 160.2% of GDP in 2024 and to continue to decline over the coming years to reach 145.3% of GDP in 2028.