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The International Monetary Fund will publish today its assessments on the effects of the coronavirus crisis on the Greek economy and specifically on how the pandemic affects economic activity, the labor market, the banking sector, but also the medium-term capacity to pay the debt. Greek public. Cash receipt.
In particular, the IMF will issue this afternoon a statement of conclusions on the findings of its staff in the context of the second post-program follow-up mission in our country. The conclusion statement will describe the initial conclusions of the IMF staff after the end of the review of the Greek economy, which will be reviewed in detail by the Fund’s Executive Board in November.
It is recalled that post-program monitoring is part of the IMF’s normal surveillance pwith countries with a debt with the IMF that exceeds the amount of 1,500 million in special drawing rights (SDR) or 200% of their participation in the Fund. Post-program monitoring missions focus on gaps and reimbursement risks to the IMF.
It should be noted that before the outbreak of the pandemic, the IMF stated that the medium-term repayment capacity of Greek public debt was strong. since our country had moderate financial needs in the baseline scenario and had a significant precautionary liquidity buffer. However, this assumption was based on the scenario that the primary surplus targets of 3.5% of GDP would be reached by 2022 and that Greece would record steady growth.
It is worth noting that the IMF as early as January 2019, when it carried out Greece’s first post-program monitoring mission, had warned that “In the case of significant negative risks, a firm response to policy conditions is needed to ensure the ability to pay the debt in the medium term.”
Given that due to the effects of the pandemic, these important negative risks have been transformed into practice, today the focus will be on the reports made by the head of the IMF for Greece, Peter Dolman, on the broader issue of public debt. .
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