{
  "title": "IMF Executive Board Concludes 2022 Article IV Consultation with Greece",
  "publication": "IMF News, June 21, 2022",
  "sourceUrl": "https://www.imf.org/en/news/articles/2022/06/21/pr22218-greece-imf-executive-board-concludes-2022-article-iv-consultation",
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  "summary": "IMF Executive Board Concludes 2022 Article IV Consultation with Greece",
  "publishDate": "2022-06-21",
  "sections": [
    {
      "heading": "Economic recovery and near-term outlook",
      "content": "- The Greek economy recovered strongly from the severe COVID-19-induced recession, with output returning to the pre-pandemic level in 2021.\n- Growth projections:\n  - Real GDP growth (percent): 2021: 8.3; 2022 (proj.): 3.5; 2023 (proj.): 2.6.\n- Inflation projections:\n  - CPI inflation (period avg., percent): 2021: 0.6; 2022 (proj.): 6.1; 2023 (proj.): 1.2.\n- Main drivers of the recovery: strong fiscal response, accommodative monetary policy and prudential policies, and sizable EU support.\n- Risks and uncertainties:\n  - Significant downside risks from a further intensification of the war in Ukraine and remaining uncertainties associated with the pandemic.\n  - External position in 2021 was moderately weaker than consistent with fundamentals and desirable policies."
    },
    {
      "heading": "Executive Board assessment and guidance",
      "content": "- Directors welcomed:\n  - Stronger-than-expected economic recovery in 2021.\n  - Early repayment of all outstanding IMF credit (completed in April), which terminates the Post Financing Assessment.\n  - Progress on reforms addressing legacies from the debt crisis.\n- Overall policy guidance:\n  - Continue pursuing prudent policies and implementing growth-enhancing structural reforms to ensure debt sustainability and promote inclusive and greener growth.\n  - Fiscal policy should remain accommodative but well-targeted in 2022, then return to a gradual and growth-friendly consolidation with sustained primary surpluses thereafter."
    },
    {
      "heading": "Fiscal policy recommendations",
      "content": "- Fiscal stance and composition:\n  - Replace across-the-board subsidies for high energy prices with targeted support for vulnerable groups.\n  - Carefully assess implications of plans for permanent cuts in social security contributions and elimination of the solidarity tax.\n  - Preserve recent increases in health spending and public investment.\n  - Resist pressures to raise pensions and civil service wages.\n  - Further enhance the Guaranteed Minimum Income scheme to form the basis for targeted support during adverse shocks.\n- Public finances (percent of GDP):\n  - Revenue: 2021: 48.9; 2022 (proj.): 48.4; 2023 (proj.): 47.4.\n  - Expenditure: 2021: 56.9; 2022 (proj.): 52.9; 2023 (proj.): 49.3.\n  - Overall balance: 2021: -8.0; 2022 (proj.): -4.5; 2023 (proj.): -1.9.\n  - Primary balance: 2021: -5.5; 2022 (proj.): 0.9.\n  - Public debt: 2021: 199.4; 2022 (proj.): 183.4; 2023 (proj.): 177.4."
    },
    {
      "heading": "Financial sector and banking system",
      "content": "- Directors commended rapid reduction of non-performing loans in major banks and authorities’ commitment to address remaining challenges.\n- Recommendations to strengthen financial resilience:\n  - Implement the new insolvency law to reduce distressed debt.\n  - Improve banks’ credit risk management and develop viable long-term restructurings.\n  - Strengthen capital buffers and the quality of capital.\n  - Restore sound profitability drivers, address medium-term funding challenges, and adapt business models.\n  - Prepare a conditions-based roadmap to guide activation of macroprudential tools in the medium term should systemic vulnerabilities emerge."
    },
    {
      "heading": "Structural reforms, labor market, and green transition",
      "content": "- National Recovery and Resilience Plan (supported by Next Generation EU funds) is a key opportunity to:\n  - Cement past reform achievements.\n  - Address structural bottlenecks, including in the labor market.\n  - Raise growth potential and ensure sustainable, job-rich, and greener growth.\n- Minimum wage and social policies:\n  - Directors noted the positive impact of the minimum wage increase on households’ purchasing power and recommended monitoring potential effects on inflation and youth unemployment.\n  - Welcomed authorities’ commitment to climate-friendly policies and stressed need for a stronger social safety net—potentially financed by higher carbon taxes when conditions allow—to facilitate the green transition."
    },
    {
      "heading": "External sector and balance of payments",
      "content": "- Balance of payments indicators:\n  - Current account (percent of GDP): 2021: -6.5.\n  - FDI (percent of GDP): 2021: -2.2; 2022 (proj.): -2.9; 2023 (proj.): -2.5.\n  - External debt (percent of GDP): 2021: 310.1; 2022 (proj.): 287.0; 2023 (proj.): 279.6.\n- Exchange rate:\n  - REER (percent change, CPI-based): 2021: -2.0; 2022 (proj.): -0.4; 2023 (proj.): -1.1."
    },
    {
      "heading": "Key socio-economic and structural indicators",
      "content": "- Population (millions of people): 10.7\n- Per capita GDP (€'000): 15.5\n- IMF quota (millions of SDRs): 2428.9\n- Literacy rate (percent): 97.9\n- Poverty rate (percent): 27.4\n- (Percent of total): 0.5\n- GHG emission per capita (tonnes of CO2 equivalent): 8.4\n- Main products and exports: tourism services; shipping services; food and beverages; industrial products; petroleum and chemicals.\n- Key export markets: E.U. (Italy, Germany, Cyprus, Bulgaria, Spain), Turkey, USA, UK.\n\nIMF Communications Department — Press Release No. 22/218, June 21, 2022\n\n---\n\n\n References\n\n- Greece and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2022/06/21/pr22218-greece-imf-executive-board-concludes-2022-article-iv-consultation"
    }
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    "Published: June 21, 2022",
    "The Greek economy recovered strongly from the severe COVID-19-induced recession, with output returning to the pre-pandemic level in 2021.",
    "Growth projections:",
    "Inflation projections:",
    "Main drivers of the recovery: strong fiscal response, accommodative monetary policy and prudential policies, and sizable EU support.",
    "Risks and uncertainties:",
    "Directors welcomed:",
    "Overall policy guidance:",
    "Fiscal stance and composition:",
    "Public finances (percent of GDP):",
    "Directors commended rapid reduction of non-performing loans in major banks and authorities’ commitment to address remaining challenges.",
    "Recommendations to strengthen financial resilience:",
    "National Recovery and Resilience Plan (supported by Next Generation EU funds) is a key opportunity to:",
    "Minimum wage and social policies:",
    "Balance of payments indicators:",
    "Exchange rate:",
    "Population (millions of people): 10.7",
    "Per capita GDP (€'000): 15.5",
    "IMF quota (millions of SDRs): 2428.9",
    "Literacy rate (percent): 97.9",
    "Poverty rate (percent): 27.4",
    "(Percent of total): 0.5",
    "GHG emission per capita (tonnes of CO2 equivalent): 8.4",
    "Main products and exports: tourism services; shipping services; food and beverages; industrial products; petroleum and chemicals.",
    "Key export markets: E.U. (Italy, Germany, Cyprus, Bulgaria, Spain), Turkey, USA, UK.",
    "[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)"
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