Greece expects an economic turnaround to start soon

Oct. 7, 2013 at 2:53 PM
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ATHENS, Greece, Oct. 7 (UPI) -- The Greek government said Monday the country's economy, mired in recession for six years, could soon turn a corner and return to growth.

"This year, the sacrifices have begun to bear fruit, giving the first signs of an exit from the crisis," Deputy Finance Minister Christos Staikouras said.

The government said the economy is expected to grow 0.6 percent in 2014. The turnaround, pushed by an increase in exports and in tourism, is expected to reduce unemployment from 27 percent to 26 percent, The New York Times reported.

The budget is expected to show a primary surplus of $462 million in 2013 and $3.8 billion in 2014. A primary surplus is a surplus without counting debt obligations.

However, the European Commission, the European Central Bank and the International Monetary Fund, which has assembled two rescue packages for Greece -- valued at $325 billion -- is expected to revise the government's budget plan before it is sent to lawmakers in Athens for approval.

Some economists in Greece were skeptical of the government's claims, however, in part because the Greek debt is now at 175 percent of the size of the country's economy.

A turnaround at this point would be "very difficult" because there is still insufficient investment to support growth, University of Piraeus economics Professor Haralambos Gotsis said.

One notable naysayer is billionaire Hungarian-American investor George Soros.

"Everyone knows that Greece will never be able to pay off its debts," Soros said, as quoted Monday by the German magazine Der Spiegel.

Economics Professor George Pagoulatos, however, said growth was "not inconceivable."

"It's feasible," he said. "As long as they stick to structural reforms and find some sort of solution to the debt."

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