Greek GDP growth rate in 2017 to determine whether 2018 goal of 2.5% is realistic

5 January 2018
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The Greek government’s economic team is eagerly looking forward to a revision of GDP growth figures – upwards – for the third quarter of 2017 as well as a robust fourth quarter in order to meet a yearly goal of 1.6 percent in growth.

Nevertheless, initial figures for the retail sector in October 2017, for instance, were less than encouraging, meaning that the embattled leftist-rightist coalition government must wait until at least early March for the conclusive results for Q3 and Q4 2017. Those results will be calculated to derive an annual figure for 2017.

Meeting the 2017 goal is crucial in determining whether a stated target of 2.5 percent in GDP growth in 2018 is realistic.

Negotiations between Athens and institutional creditors in 2018 will also, according to reports, feature a new “twist” compared with recent talks.

For instance, both sides will have to have to agreed – by May 2018, no less – over growth and fiscal targets for 2019, and without the assistance of any official figures on the course of the Greek economy up until that time.

The first official figures on the course of the Greek economy in Q1 2018 will be made available by Greece’s independent statistics authority on June 4, 2018. The date comes amid the very final stages of negotiations over whatever “open issues” are left in the third, and by all accounts, last bailout extended by creditors to the Greek state.

Such issues include the conclusion of the bailout in August 2018, the prospect of additional medium-term debt relief measures, a timetable for the imposition of more austerity measures in 2019 and 2020, as well as potential “positive measures”, and finally, the possibility of a “safety net” after the third memorandum ends.

Moreover, execution of the Greek state budget is weighted heavily, especially in terms of revenues, on the second half of the year, which means that whatever fiscal targets will decided in the fourth quarter of 2018 – months after conclusive negotiations have ended.

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