Greece Says Economy To Enter Sixth Year Of Recession In 2013

Greece Says Economy To Enter Sixth Year Of Recession In 2013

The Greek economy will continue to shrink in 2013 as it enters a sixth year of recession, the Finance Ministry said in its 2013 draft budget presented on Monday.

The government predicts the gross domestic product to contract 3.8 percent in 2013. This will follow a 6.5 percent decline in 2012, worse than its earlier forecast of 4.8 percent contraction.

A deeper recession will mount pressure on the government to find extra cash to pay the bills. The country is hoping for a positive review report from the troika, which will pave way for the disbursement of loan installment worth EUR 31.5 billion.

The draft budget includes about EUR 7.8 billion worth of austerity measures for next year. This is part of a EUR 13.5 billion worth austerity measures demanded by the troika in return for the continued payment of loan installments.

The proposals included raising the retirement age to 67 from 65. Unemployment is forecast to average 24.7 percent in 2013, up from 23.5 percent this year.

The budget projects a general government deficit of EUR 8 billion next year, down from EUR 13.2 billion this year.