Greece Blows Away EU-IMF Bailout Targets With Strong Budget Performance
Greece far exceeded its international lenders’ budget demands last year, official data showed on Friday, posting its first overall budget surplus in 21 years even when debt repayments are included.
The primary surplus — the leftover before debt repayments that is the focus of International Monetary Fund-European Union creditors — was more than eight times what they had targeted.
Data released by Greek statistics service ELSTAT — to be confirmed on Monday by the EU — showed the primary budget surplus at 3.9 percent of gross domestic product last year versus a downwardly revised 2.3 percent deficit in 2015.
This was calculated under European System of Accounts guidelines, which differ from the methodology used by Greece’s in bailout deliberations.
Under EU-IMF standards, the surplus was even larger.
Government spokesman Dimitris Tzanakopoulos said the primary budget surplus under bailout terms reached 4.19 percent of gross domestic product last year versus the 0.5 percent of GDP target.
“It is more than eight times above target,” Tzanakopoulos said in a statement. “Therefore, the targets set under the bailout program for 2017 and 2018 will certainly be attained.”
Debt-strapped Greece and its creditors have been at odds for months over the country’s fiscal performance, delaying the conclusion of a key bailout review which could unlock needed bailout funds.
The IMF, which has reservations on whether Greece can meet high primary surplus targets, has yet to decide if it will fund Greece’s current bailout, which expires in 2018.
The 2016 outperformance could lead the fund to revise some of its projections. The IMF’s participation is seen as a condition for Germany to unlock new funds to Greece.
Athens hopes to discuss the fund’s participation and its projections at the sidelines of the IMF’s spring meetings in Washington. EU and IMF mission chiefs are expected to return to Athens on Tuesday to discuss the bailout review.
After meeting Greek Finance Minister Euclid Tsakalotos in Washington, IMF chief Christine Lagarde said: “We had constructive discussions in preparation for the return of the mission to discuss the two legs of the Greece program: policies and debt relief.”
ELSTAT said the overall surplus including debt repayments reached 0.7 percent of GDP compared with a 5.9 percent deficit in 2015.
Analysts attributed the outperformance to the implementation of bailout measures and increased efforts to improve the state’s revenue collection capacity.
“It’s an impressive outperformance versus the bailout program target for the primary surplus,” said Athens-based Eurobank’s chief economist Platon Monokroussos.
“The data suggests that the 2017 fiscal target under the bailout program is fully attainable under the current baseline macroeconomic scenario,” he said.
Athens faces a primary surplus target of 1.75 percent of GDP this year.