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IMF: Greek debt is unsustainable

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IMF BoD approved the report on the Greek economy and the Greek debt sustainability, which retains the gap between the fund and the European creditors to Greece.

The fund retains the view that the debt is unsustainable, although some directors had different views on the fiscal path and debt sustainability. 

The fund said growth is projected to accelerate in the next few years, conditional on a full and timely implementation of the authorities’ adjustment program, including a rapid elimination of the capital controls introduced in mid-2015.

The long-run growth is expected to reach just under 1%, and the primary fiscal surplus is projected to come in at around 1½ percent of GDP.

Downside risks to the macroeconomic and fiscal outlook remain significant, related to incomplete or delayed policy implementation according to the IMF board.

IMF sees 4 challenges in the Greek case, NPLs, pensions, low tax exemption levels, structural inefficiencies and inefficient tax management. The fund also said that banks must have adequate capital in order to be viable for the long term.
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