Greece Sees Growth Returning Next Year

Greece on Monday said it expected a 2.7-percent growth spurt in 2017 after years of almost unbroken recession in a budget draft also predicting a better-than-expected primary surplus of 1.8 percent.

But the finance ministry said the predictions depended on a number of conditions, including tax and fiscal discipline and "the gradual return of economic activity."

Greece's economy is this year set to shrink by 0.3 percent according to the latest estimates, continuing a slide uninterrupted since 2009 except for 2014.

And the ministry added that ongoing talks with Greece's creditors to further restructure the country's enormous public debt -- a step opposed by Germany -- would be "decisive" in meeting budget goals.

The debt will grow to 315 billion euros ($351 billion) or 178.9 percent of output this year, the ministry said.

Under the terms of its latest EU bailout, Greece must register primary budget surpluses (before debt service) of 0.5 percent of GDP this year, 1.75 percent in 2017 and 3.5 percent in 2018.

There are some, including the IMF and Bank of Greece Governor Yannis Stournaras, who reckon the 3.5 percent target in 2018 is unrealistic. 

Because of this difference of opinion, the IMF has said it won't give a penny to the latest bailout -- Greece's third since 2010 -- until it sees a concrete plan from the Europeans to cut substantially Greece's massive debt burden.

The talks are ongoing, but Greece is hoping for a breakthrough on the issue by the end of the year.

The Greek government has undertaken to cut the pensions and benefits of civil servants if it fails to reach the targets and to proceed with a controversial new round of privatizations.

The budget draft calculates privatization proceeds at around 437 million next year.

The ministry on Monday also said Greece expects to pay some 100 million euros on migration management in 2017.

Another 100 million euros will be set aside to help indebted households manage their loan payments, while 300 million will be earmarked for emergency health, social protection and education costs.