01:26 GMT19 June 2021
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    WASHINGTON (Sputnik) - The recovery of Greece’s economy is expected to continue in the near-term with projected growth next year reaching 2.4 percent, the International Monetary Fund (IMF) said in a report.

    "The recovery is projected to strengthen in the near-term, with growth expected to reach 2 percent this year and 2.4 percent in 2019, and with unemployment declining as the output gap closes," the IMF said.

    However, the IMF said external and domestic risks are "tilted to the downside," including from slower trading partner growth, tighter global financial conditions, regional stability, the domestic political calendar and risks of reform fatigue.

    In the long term, "population aging is expected to weigh down on potential growth, increasing the need to foster productivity," the IMF added.

    The IMF praised the Greek authorities for sticking with reforms and policy choices that have largely eliminated fiscal and current account imbalances, stabilized the financial sector, reduced unemployment and restored growth.

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    "These substantial efforts, along with welcome debt relief by European partners, have put Greece on a path to successfully exit the European Stability Mechanism-supported program in August 2018," the IMF said.

    While a recovery is underway, the IMF cautioned, significant crisis legacies and social pressures remain and the risks to the presented outlook remain on the downside.

    "To address these issues, they encouraged further efforts to rebalance fiscal policy, strengthen bank balance sheets, and reform product and labor markets to boost sustainable and inclusive growth," the IMF said.

    Moreover, Greece no longer needs fiscal consolidation and supports a shift to a "more growth-friendly and inclusive fiscal policy mix."

    Greece has been burdened with a massive debt, loss of investor confidence and unemployed and affected by a widespread "gray" economy and successive governments have been attempting to manage the crisis through austerity measures and loans since 2010.

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    In 2015, Greece's international creditors — the European Commission, the European Central Bank and the IMF — signed an agreement with Athens approving a third bailout package worth some 86 billion euros in exchange for austerity reforms, which include pension cuts and tax hikes. The bailout package expires in August, and Greece has already received 45.9 billion euros. In late March, the European Stability Mechanism (ESM) approved the financial aid tranche of 6.7 billion euros ($8.3 billion) to Greece.


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    debt, fiscal policy, economy, International Monetary Fund, Greece
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