The Bank of Greece sees risks in achieving fiscal targets for 2016 related with recent measures announced by the government on supporting pensioners and lowering VAT rates on islands hit by the refugee crisis.
In its Interim Report on Monetary Policy, submitted to Parliament, the central bank said that despite the current positive indications and the progress achieved, the outlook for the Greek economy remains subject to risks. The most significant and immediate risk relates to a failure to reach a timely completion of the second review of the program, especially in the light of upcoming national elections in a number of euro area countries.
Furthermore, the achievement of the fiscal outcome in 2016 is subject to downside risks, related to measures announced by the Greek government on 8 December 2016 corresponding to a fiscal loosening of roughly 0.4% of GDP. These measures, which were announced after the present Report went to print, reduce significantly the estimated safety margin beyond the target for 2016. Besides, the execution of the 2016 Budget has not yet been completed and the general government performance for 2016 has not been finalized, the Bank of Greece said in its report.| | | Next → |