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Greek gov't submits 2016 draft budget, sees anemic primary surplus next year

Xinhua, October 6, 2015 Adjust font size:

Greece's Finance Ministry submitted in parliament on Monday the 2016 draft budget, forecasting an anemic primary surplus of 0.52 percent of GDP (gross domestic product) next year for the ailing economy that has been hit hard by a six year debt crisis.

The draft was formally tabled as the recently re-elected Prime Minister Alexis Tsipras was taking the floor to make his new government's policy statements.

The draft 2016 budget forecasts that the Greek national economy will shrink by 2.3 percent this year and 1.3 percent in 2016.

The draft sees a primary deficit of 0.24 percent of GDP in 2015 and a primary surplus of 0.52 percent in 2016, in line with bailout targets.

Greece's public debt was expected to further rise from 181 percent of GDP this year to 192.4 percent in 2016, including the third bailout loans agreed with international lenders this summer.

According to Athens' new estimates, unemployment rates will also increase from 25.4 percent this year to 25.8 percent in 2016.

Greek Finance Minister Euclid Tsakalotos discussed the draft budget projections during a Eurogroup meeting on Monday, as well as the next round of policies Athens needs to take with no delays to secure the release of the next tranche of international aid in coming weeks.

The first list of more than 40 prior actions that had been initially agreed with creditors before the call of the September 20 early general elections, must be implemented by mid- October to unlock a two-billion-euro tranche, it was reaffirmed after the Eurogroup talks.

This list includes outstanding measures from August and September such as a new pension reform and the conclusion of the privatization of regional airports.

A second of list prior actions, that should include a new taxation system reform, must be finalized by mid-November to unlock a further one billion euro loan installment and pave the way for the recapitalization of Greece's banking sector by the end of the year. Enditem