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IMF Expects Marginal Greek Growth in 2014

The Greek economy will grow by 0.6% in 2014 after a 4.2% recession this year, the International Monetary Fund (IMF) said on Tuesday.

In its annual World Economic Outlook report, the IMF predicted a gradual recovery of the economy, with the growth rate reaching 2.2% in the fourth quarter of 2014, after a recession of 2.6% in the third quarter of 2013.

The inflation rate is forecast to remain at a negative level in 2014 (-0.8% from -0.4% in 2013), while the current account deficit is projected to fall further to 0.5% of GDP next year from 1.0% of GDP in 2013.

The IMF noted that "an adjustment is needed to boost external competitiveness and to avoid the reappearance of large deficits in their current account balances, as their economies will recover".

The report noted that an adjustment through a reduction of labor costs, particularly in Greece and Ireland, has been achieved already.

The Fund also noted that economic growth is beginning to reappear in the Eurozone, although very weak, while it stressedr the need for a full banking union within the Eurozone.