Greece sticks to bailout targets in draft 2016 budget

Greece stuck strictly to the targets enshrined in its international bailout program in unveiling a draft budget which sees the economy shrinking by 1.3 percent in 2016 before returning to growth in 2017.

The draft budget, which was submitted to parliament by the finance ministry, sees a primary fiscal surplus before debt service costs of 0.5 percent of GDP next year after a 0.24 percent primary deficit in 2015.

Central government debt is seen peaking at 197.7 percent of gross domestic product in 2016, including new loans from Greece’s 86 billion euro third bailout agreed in August.

The draft budget maintained the official estimate that gross domestic product will contract by 2.3 percent this year, although officials have said the recession may have been shallower and the figure could be adjusted in the final budget.

The 2016 budget foresees a general government deficit of 2.3 percent of GDP. It said the government expects a gradual return to bond market access "in the coming years" but set no target date. [Reuters]