Greece will return to primary surpluses beginning in 2022 after reporting higher primary deficits and public debts in 2020, the International Monetary Fund said in its “Fiscal Monitor Report,” released on Wednesday.
The IMF based its 2020 forecasts on the understanding that political interventions to manage the pandemic have led to a simultaneous drop in public revenue and a jump in public spending in the country.
More specifically, the IMF expects the country’s primary deficit to reach 6.0 percent of GDP this year and the GDP to contract by 9.5 percent, pushing the Greek public debt to 205 percent of GDP in 2020.
The Fund expects the fiscal deficit to be balanced in 2021 and to begin presenting primary surpluses beginning in 2022 (1.4 percent of GDP), rising to 1.9 percent in 2023, 1.7 percent in 2024 and 1.5 percent in 2025.
The country’s public debt is projected to reach 205.2 percent of GDP this year, from 180.9 percent in 2019, and to ease to 200.5 percent in 2021 and 187.2 percent in 2022.
In a press release from the Greek Finance Ministry, Alternate Finance Minister Theodore Skylakakis said that the Greek state budget recorded a primary deficit of 7.008 billion euros in the period from January-September, from a budget target for a primary surplus of 2.568 billion euros, reflecting the significant economic impact of the pandemic.
“September revenues were significantly down because of measures to suspend tax payments because of the pandemic,” the Minister stated, adding that tax revenues totaled 3.942 billion euros in September.
This was down 1.904 billion euros compared with pre-pandemic targets, of which 1.6 billion represented the value of suspended tax payments. “Based on these suspensions, revenue course is compatible with revised provisions of the 2020 budget,” Skylakakis noted.