- POSTED: 11 Jun 2014 01:44
Greece is expected to miss targets to tame its runaway debt and faces a financing gap of 12.6 billion euros next year, the International Monetary Fund said in a report.
ATHENS: Greece, which swore in a new cabinet on Tuesday, is expected to miss targets to tame its runaway debt and faces a financing gap of 12.6 billion euros (US$17.1 billion) next year, the International Monetary Fund (IMF) said in a report.
"Public debt sustainability risks remain significant," said the global lender, which first joined the bailout to avert Greece's bankruptcy in 2010.
"With debt projected to exceed the targeted path, it is therefore essential that Greece's European partners reaffirm their commitments to the agreed debt strategy by standing ready to provide the additional relief needed to keep debt on this path," the IMF said.
The IMF on Tuesday maintained its forecasts on Greek debt levels from its predictions a year ago, saying the level would peak at around 174 per cent of output this year before declining to about 128 per cent in 2020, and 117 per cent in 2022.
However, the IMF had set a target of 124 per cent by 2020 - levels last seen in 2009.
The Washington-based lender also called on Athens to take "additional measures" to close a projected gap of 12.6 billion euros "after May 2015".
The Greek finance ministry however shrugged off the warning, saying the economy had exceeded expectations in 2013, and could do so again.
"The Greek government expects that, as in 2013, its predictions will be carried out and that no further austerity measures will be required to meet economic and fiscal goals in 2015-16," the ministry said.
Athens expects a return to growth this year from a recession which has slashed Greece's output by a quarter and sent the unemployment rate soaring over 26 per cent.
The government now hopes to begin debt relief talks with its EU-IMF creditors after achieving a primary surplus last year.
The four-year bailout programme worth a total of 173 billion euros was granted to Greece, on strict conditions that Athens undertake massive reforms.
Europe's rescue is due to wind up at the end of this year, but officials have said they stand ready to take additional measures to help ease Greece's crushing debt burden.
Germany, Europe's largest economy, has raised the prospect of a third rescue package for the struggling Eurozone nation.
German Finance Minister Wolfgang Schaeuble said in an interview last week that "it's possible that Greece might require further aid, of a limited amount."