FinMin Tsakalotos: IMF report does not reflect Greece’s real economic situation

The International Monetary Fund’s (IMF) economic forecasts on Greece do not reflect the actual picture of the country’s economy, Finance Minister Euclid Tsakalotos said in a letter attached to the fund’s report on the Greek economy )article IV), published on Tuesday.

“Despite the evidence and analysis presented, we note that the report is not fair in many areas, while many conclusions are not consistent with the recent and well-documented empirical data,” the minister says.

“Firstly, the report presents an overall picture of (Greece’s) reform effort which is not representative of the actual effort made by the Greek government during the ESM program. The implementation of structural reforms accelerated significantly, particularly of deep reforms, such as the consolidation of pension funds into a single fund, the overall pension reform, the creation of an independent tax authority, many product market reforms (including significant progress in the introduction of OECD recommendations) and a wide-ranging reform program,” he writes.

Concerning budgetary developments, Tsakalotos said initial indications show that the budget surplus for 2016 will be around 2 percent of GDP. “Despite important budgetary over-performance, the IMF analysis does not proceed in a major revision of budget surpluses for 2018 and beyond, remaining at the forecast for 1.5 pct, despite the overwhelming evidence to the contrary,” he said.

Aside from the need for budget revisions, the significant budget surplus in 2016 questions three important arguments in the report, Tsakalotos continues. “The most important argument, that Greece cannot maintain high budget surpluses above 1.5 pct of GDP, contradicts recent developments.”