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Last year it closed with the debt of the public administrations in 338,000 million euros and the cash reserves in 31,000 million euros. The Finance Ministry is now awaiting final figures on 2020 gross domestic product and the extent of the recession to establish how far above the 200% level the debt-to-GDP ratio will rise.
If the forecast that the GDP contraction has not exceeded 10.5% is correct, which means that the economy will fall to lows never seen since 2002, at 162-163 billion euros, Greece will begin its effort to reduce the debt / GDP ratio of the level. of 207% -208%. By 2021, all the effort will be focused on confirming the projection of an economic rebound above 4.5%, so that the GDP returns to at least 172-173 billion euros and the debt / GDP ratio remains below the 200% mark. Therefore, all the effort will be in the denominator. As for debt, the outlook seems clear.
The Public Debt Management Agency plans this year to carry out new bond issues for an amount of about 12,000 million euros, or more if conditions permit. The bond program is expected to launch this month with an issue maturing in more than 10 years.
With the anticipated payment of the expected debt (both to the International Monetary Fund with 3,600 million euros and to other official creditors) and with the payment of the tranches for next year, the debt in 2021 is expected to close at 343-345,000 million of euros.
The return to growth this year is the biggest challenge for the ministry, as the recession is more likely to extend into the first quarter of 2021, given the constraints imposed on the economy. For the second quarter there are some possibilities of stabilization, since the comparison will be made with the second quarter of 2020, when the GDP contracted by 15%, and all hopes for the GDP rebound are set in the second half of the year Therefore, the objective of 4.8% is reached.
The return to growth will be financed through new fiscal deficits, with a primary deficit amounting to 6.6 billion euros (3.8% of GDP) and the use of considerable resources, amounting to 5.5 billion euros, from the fund of the UE Next Generation.
The earlier and more effectively these resources are absorbed, the greater the response from the private sector, facilitating a return to growth.
