IMF Warns, Greece is Likely to Miss Budget Surplus Target

IMF has warned that Greece will probably miss their budget surplus target this year. They have also asked the rest of Europe to ease their demands on Athens. If their pressure doesn’t cease, it likely the IMF won’t join their bailout programme. They also state that any short term boost to their income will likely disappear and will make it impossible for the country to meet their 2018 targets for its primary budget surplus.

Excluding their debt interest, the IMF very well expects them to exceed their spending by a whole 1.8 percent of national income this year. Keep in mind, that’s after a surplus of 3.3 percent this year. Though Greece has shown some marginal surplus increase so far this year, it is likely due to temporary factors and will play no factor in the bigger picture. They are expected to jump from their surplus of 50 percent in 2016 to 47 percent in 2018.

Greece is currently going through their third bailout programme since the financial crisis. The are set to receive eight six billion euros from creditors. The IMF has been on board with them for the past two bailouts, but are now refusing to take part in helping. Though Greece is slowly making progress to get them back on board with the bailout. The Greek government has made a deal with the other European countries to reform in terms of pensions and taxes. It’s a deal that will be implemented in 2019.

Despite this deal, the IMF wants Greece to a agree on a primary surplus for year years beyond 2018. Them along with other countries in Europe are demanding that Greece keep a steady 3.5 surplus for the next three years. Though the IMP feels Greece will fail a steady 3.5 surplus and will agree if they could at least keep a 1.5 surplus.