IMF sees primary surplus at 3.5 pct till 2022

The Greek primary budget surplus will remain unchanged at 3.5 percent of gross domestic product up to 2022, according to the International Monetary Fund, which has reiterated its forecast that Greece will stick to its agreement with the eurozone.

In the Fund’s Fiscal Monitor report published on Wednesday, the IMF further forecasts that the primary surplus will slip to 3 percent of GDP in 2023 and 2.8 percent in 2024; these rates are consistent with Greece’s long-term commitment for rates of at least 2.2 percent until 2060. Compared to the European Commission, the IMF is slightly less optimistic for 2022, as Brussels expects the primary surplus to come to 3.8 percent of GDP that year.

Crucially, in its calculations, the IMF takes it for granted that the tax-free ceiling will be reduced as of next year, as planned. The Commission has also factored that into its estimates.

However, there is uncertainty on this after repeated statements by Finance Minister Euclid Tsakalotos that the issue will be reviewed in due course, and the recent statement by Eurogroup head Mario Centeno, who did not rule out a review of the measure.