The IMF forecasts a significant decrease in Greece’s public debt, by 16.5 percentage points, over the next five years and despite lower annual primary budget surpluses.
The forecast was included in the IMF’s Fiscal Monitor report, which was published on Wednesday.
Specifically, the D.C.-based Fund forecasts that Greece’s debt-to-GDP ratio will reach 146.7% this year and drop to 130.6% by 2030, a far cry from the bailout era that bedeviled the country from 2010 to 2018. Primary budget surpluses, albeit lower than forecast by the Greek government, are also predicted for each year until 2030, the IMF announced.
At the same time, the Fund estimates that primary surpluses will be significantly lower than Athens’ official targets. This development, according to the IMF, comes even though experience has shown that, at least in the last three years, the country has recorded higher primary surpluses than those forecast by the government.
Specifically, for 2025 a surplus of 3.2% of GDP is forecast, compared to 3.6% estimated by the government, while for 2026, the Fund sets the bar at 2.3% instead of 2.8% forecast in the new state budget.
Subsequently, primary budget surpluses are expected to reach 1.8% for 2027 and 2028, while increasing marginally to 1.9% in 2029, and finally reaching 2% of GDP in 2030.
Although the primary surpluses projected by the IMF are lower than in recent years, the Fund considers that achieving the specific levels will be sufficient to slash the country’s foreign debt.
