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Greece 's Primary Surplus to Reach 2.9 % In 2015

staikouras1The government will aim for a primary budget surplus of 2.9% next year, just shy of the 3% target set out under the bailout agreement, says the deputy finance minister.
The target is part of a 2015 draft budget that Athens will submit to parliament on Monday amid a bailout review by the troika of inspectors from its international lenders.
In an interview with “To Vima,” Deputy Finance Minister Christos Staikouras also said that a “solidarity tax” introduced at the peak of Greece’s debt crisis will be scaled back by 30% next year.
Staikouras also said that Athens was expected to beat this year’s primary budget surplus target of 1.5% of GDP.
“Based on current data, the primary surplus (of 2014) is estimated at around 2 percent of GDP, considerably higher than the target,” Staikouras said.
“The country is entering into a long period of sustainable growth rate and primary budget surpluses, which will boost employment, cut unemployment and improve living standards for all citizens,” he added.
“This is the result of unprecedented sacrifices by Greek households and businesses. And those sacrifices won’t be wasted.”
The budget surplus has been viewed as an indicator of Greece ‘s progress in putting its finances in order during an economic crisis that wiped out almost a quarter of its GDP and sent unemployment to record highs of nearly 27%.
Greece will issue more bonds next year as it posts a second year of growth, the government forecasted in its draft 2015 budget.
Athens said it would issue a seven-year and 10-year bond as well as a treasury bill of over 26 weeks next year, emboldened by a successful return to debt markets earlier this year following four years in the red.
Athens also anticipates a budget surplus excluding interest payments of 2.9 percent of GDP next year, just shy of the 3 percent target set under the country’s 240-billion-euro EU/IMF bailout.
The budget also predicted that Greece ‘s economy would grow 2.9% next year, in line with the bailout target.
Athens is hopeful that it can exit its 240-billion-euro bailout package at the end of the year, over a year ahead of its scheduled 2016 time frame, in a bid to rally austerity-weary Greeks and secure the fragile coalition government’s survival.
Unemployment is expected to fall to 22.5 percent in 2015 from 24.5 percent this year, while debt is expected to fall to 168 percent of GDP from 175 percent this year, the draft budget said.
Greece topped its fiscal targets and achieved a budget surplus in 2013, a year ahead of schedule, paving the way for some form of additional debt relief from its euro zone lenders. Talks on further debt relief will resume later this year.

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