IMF slashes growth forecast for Greece

From The Guardian UK:   http://www.guardian.co.uk/business/2011/dec/13/imf-slashes-greek-growth-forecast

MF report likely to fan financial market fears over debt default as Greece struggles to cope with austerity and recession

, economics editor, and in Athens
guardian.co.uk, Tuesday 13 December 2011

The International Monetary Fund slashed its growth forecasts for Greece and warned that ever-deepening recession was making it harder for the debt-ridden country to meet the tough deficit reduction targets under its austerity programme.

In a report likely to fan financial market concerns about a possible debt default, the regular health check by staff at the Washington-based Fund said the situation in Greece had “taken a turn for the worse”.

Poul Thomsen, deputy director of the IMF‘s European department and its mission chief to Greece, said: “We have revised growth down significantly to -6% in 2011 and -3% in 2012. We expected 2011 to be an inflection point when the recession bottomed out, followed by a slow recovery. But the economy is continuing to trend downwards. The hoped for improvement in market sentiment and in the investment climate has not materialised.”

The IMF, together with the European Union and the European Central Bank has imposed tough conditions on Greece as the price of financial support that has allowed the government in Athens to continue paying its bills. In the fifth report carried out since the start of the crisis 18 months ago, IMF officials suggested that the austerity programme might need to be eased in view of the damage being caused to the economy by the recession.

“Discussions [at the IMF] focused on recalibrating the programme’s macroeconomic framework and adapting the implementation of reform and adjustment policies to an appropriate and feasible pace.”

Continue reading at:   http://www.guardian.co.uk/business/2011/dec/13/imf-slashes-greek-growth-forecast

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