## IMF Executive Board Concludes 2019 Article IV Consultation with Greece _IMF News, November 14, 2019_ ## Source details **Canonical URL:** [IMF Executive Board Concludes 2019 Article IV Consultation with Greece](https://www.imf.org/en/news/articles/2019/11/14/pr19418-greece-imf-executive-board-concludes-2019-article-iv-consultation) ## Other formats - [Markdown version](/en/news/articles/2019/11/14/pr19418-greece-imf-executive-board-concludes-2019-article-iv-consultation/index.md) - [Structured JSON version](/en/news/articles/2019/11/14/pr19418-greece-imf-executive-board-concludes-2019-article-iv-consultation/index.json) - [Bundle manifest](/en/news/articles/2019/11/14/pr19418-greece-imf-executive-board-concludes-2019-article-iv-consultation/bundle-manifest.json) ## Bibliographic details - Published: November 14, 2019 --- ### Executive summary and main findings - On November 13, 2019, the Executive Board of the IMF concluded the Article IV consultation with Greece. - Growth has returned but has "so far fallen below expectations." After a 1.9 percent expansion in 2018, growth moderated in the first half of 2019, constrained by lackluster private investment and under-execution of public investment. - Unemployment rate fell to 16.9 percent (seasonally adjusted) in July, but structural unemployment remains high and economic activity is below potential. - Bank balance sheets remain significantly impaired and banks continue to reduce the amount of (net) credit provided to the economy. - Near-term downside risks are significant, including rising protectionism and weaker global growth, roadblocks to economic reforms, and further deterioration of bank balance sheets. The medium-term outlook is more balanced, particularly if pro-growth reforms translate more quickly into results and markets react favorably to additional progress. ### Growth outlook and external position - Real GDP growth projections: - 2019 (proj.): 1.8 percent - 2020 (proj.): 2.3 percent (supported by fiscal loosening and higher private investment financed mostly by foreign capital inflows) - Medium term: prospects weighed down by adverse demographics and low productivity - External position: described as weaker than indicated by medium-term fundamentals. - Balance of payments projections: - Current account (percent of GDP): 2017: -2.4; 2018: -3.5; 2019 (est.): -2.8; 2020 (proj.): -2.9; 2021: -3.2; 2022: -3.3; 2023: -4.0; 2024: -4.2 - FDI (percent of GDP): 2017: -1.5; 2018: -1.6; 2019: -1.7; 2020: -1.8 - External debt (percent of GDP): 2017: 227.2; 2018: 222.4; 2019: 219.3; 2020: 212.7; 2021: 206.3; 2022: 201.6; 2023: 198.6; 2024: 196.5 - REER (percent change, CPI-based): 2017: -0.4; 2018: -0.1 ### Fiscal outlook and public debt - General government finances (percent of GDP): - Revenue: 2017: 48.4; 2018: 47.8; 2019: 47.7; 2020: 46.8; 2021: 45.8; 2022: 45.3; 2023: 44.9; 2024: 44.4 - Expenditure: 2017: 47.4; 2018: 46.9; 2019: 47.6; 2020: 47.3; 2021: 46.6; 2022: 46.2; 2023: 46.1; 2024: 45.6 - Overall balance: 2017: 1.0; 2018: 0.1; 2019: -0.5; 2020: -0.8; 2021: -0.9; 2022: -1.2; 2023: -1.3 - Overall balance (excl. program adjustors): 2017: 0.7; 2018: … - Primary balance: 2017: 4.1; 2018: 4.2; 2019: 3.7; 2020: 3.1; 2021: 2.7; 2022: 2.6; 2023: 2.4; 2024: 2.2 - Public debt: 2017: 179.3; 2018: 184.9; 2019: 176.5; 2020: 171.4; 2021: 166.3; 2022: 161.0; 2023: 155.6; 2024: 152.0 ### Financial sector assessment - Bank balance sheets are "significantly impaired." - Banks continue to reduce net credit to the economy. - Directors welcomed the government's more ambitious nonperforming exposure (NPE) reduction objectives and noted that the proposed state‑supported NPE securitization guarantee scheme could provide important backing. - Directors stressed the need for a comprehensive, ambitious, and well‑coordinated strategy to clean up bank balance sheets, relying on market‑based mechanisms (with any public support subject to cost‑effectiveness assessments). - Recommended complementary reforms include improvements in the legal financial framework, specifically an overhaul of the personal insolvency law to eliminate primary mortgage protection to strengthen payment discipline. ### Structural reforms and governance priorities - Directors emphasized policies to boost productivity and narrow the competitiveness gap. - Welcomed government efforts to unblock privatization, implement business deregulation, and restore elements of program‑era labor market reforms. - Noted that benefits from labor market reform require parallel progress with other structural reforms, particularly further liberalization of product markets. - Urged continued improvements in public sector efficiency and governance: - Strengthen public revenue administration, including strengthening tax enforcement. - Enhance efficiency and quality of the judicial system, including enforcement of contracts. - Speed up anti‑corruption reforms. - Welcomed recent progress in strengthening the AML/CFT regime and anti‑corruption institutions, but underscored important remaining shortcomings. ### Executive Board assessment and policy recommendations - Directors recognized progress in reform implementation during the program period and the economy’s continued recovery, but noted important challenges remain. - Directors took positive note of the new government’s commitment to growth‑friendly and inclusive policies and welcomed early policy actions. - Key policy recommendations: - Sustain and deepen reform implementation, deploying a full range of policy tools, and demonstrate strong political resolve to tackle vested interests to boost investment, growth, and social inclusion. - Cut direct tax rates (supported) while making more ambitious efforts to broaden tax bases and enhance tax payment compliance. - Shift spending priorities toward more investment and targeted social spending. - Strengthen fiscal risk management and contingency planning. - A number of Directors considered building consensus with European partners around a lower primary balance target to support growth objectives; a number of other Directors stressed keeping the agreed target given European fiscal rules and implications for debt sustainability. - Restore financial sector resilience and ability to support growth through NPE reduction, market‑based mechanisms, and legal framework reforms. ### Selected country facts and indicators - Population (millions of people): 10.7 - Per capita GDP (€'000): 17.2 - IMF quota (millions of SDRs): 2,428.9 - Literacy rate (percent): 97.1 - (Percent of total): 0.51 - Poverty rate (percent): 31.8 - Main products and exports: tourism services; shipping services; food and beverages; industrial products; petroleum and chemical products. - Key export markets: EU (Italy, Germany, Bulgaria, Cyprus, UK), Turkey, US. - Employment — Unemployment rate (percent): 2017: 21.5; 2018: 19.3; 2019: 17.5; 2020: 15.6; 2021: 14.4; 2022: 13.6; 2023: 12.9 - Prices — CPI inflation (period avg., percent): 2017: 1.1; 2018: 0.8; 2019: 0.5; 2020: 0.6; 2021: 1.3 - Money and credit: - Broad money (percent change): 2017: 5.7; 2018: 4.3 - Credit to private sector (percent change): 2017: -5.8; 2018: -7.5 - 3-month T-bill rate (percent): (not provided) *Source: IMF press release, November 14, 2019.* --- ## References - [https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg) - [The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx) - [Greece and the IMF](http://www.imf.org/external/country/GRC/index.htm) - [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [http://www.imf.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2019/11/14/pr19418-greece-imf-executive-board-concludes-2019-article-iv-consultation_