It is budget day for the Greek government, which is sounding bullish about the country’s prospects for 2014. It says this will be the year the long recession ends, and after seven years of a worsening economy, green shoots will start to poke through.
Growth will return to positive, if anemic territory, although the unemployment figures remain awful, and debt as expressed by GDP remains becalmed, close to this year’s historic high.
The economy has shrunk by 25% compared to its 2007 peak, and just making that back will take years. Greece remains dependent on outside aid for now.
“The citizens have made enormous sacrifices both in terms of fiscal adjustment, and in terms of living standards. However, beginning this year, these sacrifices began to bear fruit. The Greek economy is projected to emerge from its prolonged recession, primarily due to the recovery of investments and the strengthening of exports,” says Greece’s Deputy Finance Minister Christos Staikouras.
The budget is published between visits by the Troika, Greece’s international creditors who when they next come to Athens must decide on a new slice of billions of euros of aid based in part on this budget. Athens hitting its targets also triggers fresh debt relief, and an economy in surplus this year and next wins debt cuts. A lot is at stake.