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Roundup: Greek recession milder than expected: official

Xinhua, October 21, 2015 Adjust font size:

Greece's recession in 2015 seems to be milder than initially estimated, Greek Deputy Finance Minister Yorgos Chouliarakis said on Wednesday, expressing optimism that capital controls in the debt-laden country might be lifted in early 2016.

Chouliarakis addressed a parliamentary committee on the 2016 budget draft which was expected to be put to vote in the plenary in November, as auditors of Greece's lenders held a round of meetings with Greek government officials on Athens' progress in the implementation of prior actions required before the release of the first tranche of the new bailout.

Should the program to address the six-year debt crisis runs smoothly in the coming months, fiscal data will improve and 2015 recession will stand at -1.4 percent of GDP compared to a previous forecast of -2.3 percent, he said. The 2016 recession could drop to -1.3 percent from -1.5 percent initially forecast.

In addition Greece could lift as early as in June 2016 the capital controls imposed in late June this year as part of efforts to stave off a collapse of the banking sector amidst fears of an imminent Greek default and Grexit.

The Greek Finance Ministry's estimates depend on the progress of the implementation of the new third Greek bailout agreed this summer.

Athens must meet targets and timetables set for the fresh wave of austerity and reform policies to secure further international loans in coming weeks to conclude a new recapitalization of Greek banks by the end of this year and negotiate a debt relief.

The Greek parliament voted a first omnibus bill with prerequisites last week and the government intended to put a second similar bill to vote by mid-November to unlock the first 3 billion euros of the new 86-billion-euro three-year bailout program.

As lenders' envoys started an informal assessment of the program, reactions by recession-hit Greek society refueled.

On Wednesday public servants held a work stoppage protesting a planned pension reform and cost-cutting measures, people with disabilities held a rally protesting new cuts on their benefits, and parents with children studying at private schools gathered to protest the introduction of value-added tax on private education. Endit