Greece: First Post-Program Monitoring Discussions-Press Release; Staff Report; and Statement by the Executive Director for Greece
IMF Staff Country Reports, March 12, 2019
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- Greece: First Post-Program Monitoring Discussions-Press Release; Staff Report; and Statement by the Executive Director for Greece
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Bibliographic details
- Published: March 12, 2019
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781498302579.002
Executive summary and near-term outlook
- The economic recovery in Greece is accelerating and broadening.
- Growth and job creation in Greece are expected to accelerate further in 2019.
- Medium-term public debt repayment capacity remains robust, but is subject to rising risks amid still significant vulnerabilities.
- Downside risks are rising.
Key vulnerabilities and risks
- Significant remaining vulnerabilities persist despite recovery.
- Rising wage pressures could negatively affect competitiveness and employment if not countered by reforms.
- Banking-sector weaknesses: slow cleanup of bank balance sheets, impaired lending, and a weak payment culture amplify financial-sector and macroeconomic risks.
- Public debt repayment capacity, while robust in the medium term, faces exposure to these vulnerabilities and rising risks.
Policy priorities and recommendations
- Enhance labor market flexibility.
- Boost productivity and competitiveness.
- Reconsider recent changes in collective bargaining policies.
- Press ahead with the unfinished reform agenda to mitigate negative competitiveness and employment effects from rising wage pressures.
- Speed up efforts to clean up bank balance sheets, restore lending, and improve Greece’s weak payment culture.
Focus of the discussions
- Policies to promote stronger growth and strengthen the economy’s resilience were central to the First Post-Program Monitoring discussions.
- The discussion report emphasizes the importance of labor-market reform and measures to enhance competitiveness and financial-sector stability.
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