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Tsipras makes fiscal promises despite IMF gloomy projections

Featured Tsipras makes fiscal promises despite IMF gloomy projections

Greek PM Alexis Tsipras intervened from Thessaly following the bleak projections by the IMF on Greece’s primary surplus.

In an effort to bolster the image of the Greek economy, Mr. Tsipras opted to selectively focus on the positive aspect of the data realised by the IMF that Greece would achieve a GDP growth rate of 2.65% for 2018, deliberately ignoring the Fund’s revised negative forecasts that the current surplus would reach only 2.2% against the initially estimated 3.5%, something that would force the government to implement a series of new harsh measures. “Even our ‘arch friends’ the IMF, which has systematically underestimated its projections for Greece from 2015 onwards, predicts that growth for 2018 will reach 2.65%. I believe that we will have more”, predicted Mr Tsipras, while he estimated that in 2017 the GDP would close around 2%.

The Prime Minister appears overly optimistic about the course of the economy, as he it is essentially the only defence he has. However, the figures he bases this optimism on are far from solid, as the revenue shortfall in recent months shows that the policy of over-taxation has been abused, as Greek taxpayers have exhausted the ability to pay. It has become apparent that the Greek government and the IMF are preparing for a tough round of talks on the 3rd reviews, with the main question being what stance the European institutions will take given the replacement of former German Finance Minister Wolfgang Schauble.