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Finance

Greece's economy projected to grow 2.1% in 2025, IMF says

Published by Global Banking and Finance Review

Posted on January 30, 2025

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ATHENS (Reuters) - Greece's economy is projected to grow 2.1% in 2025, mainly driven by investment, the International Monetary Fund mission said on Thursday, adding that any crisis in major euro area countries as well as global uncertainties could hamper growth.

This compares with a Greek government forecast of 2.3% for this year

In the medium term, growth is forecast to slow to around 1.25% against a backdrop of demographic "headwinds and sluggish" productivity growth, the Fund said in a statement.

The current account deficit is expected to narrow gradually below 4% of gross domestic product over the medium term, the IMF said, with imports set to slow along with the winding down of post-COVID recovery funds from the European Union.

"The primary surplus is expected to remain high at around 2-1/2% of GDP in 2025 as reduced revenue from an additional cut in social security contributions is expected to be broadly offset by revenue gains from reforms aimed at reducing tax evasion and increasing tax compliance," it said.

The IMF, one of Greece's official lenders during its debt crisis which erupted in late 2009, urged the country to accelerate structural reforms to help bolster public investment.

"It is essential to protect non-pension social spending, such as healthcare and education, to promote inclusive growth, while enhancing efficiency," it said.

(Reporting by Ivana Sekularac; Editing by Gareth Jones)