Greece Ends Year With Surplus; Passes Landmark Budget That Projects Economic Growth

Greece Ends Year With Surplus; Passes Landmark Budget That Projects Economic Growth

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The Greek parliament has approved a 2017 budget that calls for keeping spending restraints in place, while projecting economic growth to continue at 2.7%.

Prime Minister Alexis Tsipras said that 2017 will mark Greece’s “final exit” from its nearly decade-long financial crisis. The budget adds more than 1 billion euro in new taxes, mostly indirect taxes on items from phone calls to alcohol. It also cuts spending by over 1 billion euro.

Greece is meeting and exceeding goals for the third year in a row,’” said Mr. Tsipras, who noted that Greece notched a 1.75% budget surplus in 2016, and predicted the 2017 surplus would reach 2%.

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Mr. Tsipras said revenue targets had been exceeded for the second year in a row in 2016, almost double the initial goal. He said growth in Greece’s economy signals a return to economic stability. “Indeed, in the third quarter, recorded growth in gross domestic product of 1.8% of GDP, the largest since the beginning of the chrisis,” Mr. Tsipras said.

According to government figures, investment into the country increased in 2016 by 3.3%, while the second and third quarter of 2016 saw investment grow by 10%. In 2017, the government projects new investment will increase by 9.1%. Mr. Tsipras noted Greece was ranked first in reforms and changes this year by the Organization for Economic Co-operation and Development.

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In an address to Parliament, Finance minister Euclid Tsakalotos stressed the improvement in unemployment, which has been reduced from 27% to 23% and is expected to fall further in 2017.

George Chouliarakis, the Alternate Minister of Finance, said “the vast majority of issues’” with the country’s creditors have been agreed upon, including market and financial sector reforms, as well as in the areas of health, education and tax collections.

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(Photo by Christine Zenino, CC)

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