IMF – Greek debt remains high, but it will gradually decrease

Reduction of public debt from this year and return of Greece to primary surpluses from 2023 the International Monetary Fund (IMF) predicts for Greece in a report released today.

According to the Fund’s Fiscal Monitor report, Greece is expected to record a primary deficit of 7.3% of GDP, which is limited to 1.3% in 2022. After rising to 0.2% in 2023, the surplus is expected to rise to 0, 6% of GDP in 2024, to 1% in 2025 and 1.5% in 2026.

At the same time, this year the de-escalation of public debt is expected to begin, which last year, according to IMF estimates, amounted to 211.2% of GDP. It is estimated that it will be reduced to 206.7% this year and will fall below the limit of 200% of GDP (199.4%) in 2023.

The subsequent de-escalation is expected to be as follows: 192.4% in 2023, 188.2% in 2024, 184% of GDP in 2025 and 179.6% in 2026.

What will the fiscal adjustment be based on?

Fiscal adjustment will be based more on reducing public spending, which is projected to fall from 60.7% of GDP in 2020 to 59% this year and 52.4% in 2022 and to continue to decline in the coming years to reach 48.3% in 2026.

Government revenues are projected to decline slightly in 2022 and 2023 to 48.1% of GDP from 48.8% this year and then gradually decline to 46.8% in 2026.

The general government debt peaked, according to the IMF, at 2020 at 211.2% of GDP, while it is projected to decline this year to 206.7% and continue to de-escalate thereafter to decline in 2026 to 179.6%.