Athens News Agency: News in English, 07-10-01

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From: The Athens News Agency at <http://www.ana.gr/>

CONTENTS

[01] Economy to grow by 4.0% in '08, draft budget

[01] Economy to grow by 4.0% in '08, draft budget

The draft budget's main axes are fiscal restructuring to ensure a balanced budget by 2010; reducing deficits of public enterprises and the wider publich healthcare system; continuing tax reform based on combatting tax-evasion and expanding the tax base; combatting poverty through a recently announced National Social Cohesion Fund and introducing a national pension. Other priorities are greater regional development by effectively using community funds, reforming the social security system after extensive social dialogue and further supporting a new development model by boosting exports and high-value activities.

Alogoskoufis, commenting on the draft budget's main provisions for 2008, said he expected a 10.5 pct increase in investments, a 1.9-percent rise in employment and reduction of the unemployment rate to 7.4 percent. The minister said exports were expected to rise by 7.3 percent and imports by 7.8 percent, while the inflation rate is expected to ease to 2.6 pct, from an expected 2.7 pct figure this year.

Alogoskoufis said the government did not plan to raise the VAT rate -- the highest rate stands at 19 percent currently -- while he pointed to an emphasis on lower tax burdens and combatting massive tax evasion in the fuel sector.

The central government's net revenues are forecast to reach 59.780 billion euros next year, or 26.7 percent of the country's Gross Domestic Product, up from 25.8 pct this year, while total spending (excluding interest payments) are projected to ease slightly, to 30.1 pct of GDP next year form 30.4 pct this year.

The public investment programme's payment ceiling is projected to reach 9.2 billion euros, of which 6.7 billion will cover co-funded projects employing EU structural funds and 2.5 billion in projects financed with national funds.

Next year's draft budget also envisages a fiscal benefit of 5.050 billion euros in the country's financial transactions with the European Union, up from 4.718 billion euros this year, reflecting higher revenues from EU.

The Greek minister noted that the general government's debt will fall below 100 percent of GDP in 2008, the the first time since 1992. The government's debt is projected at 213.330 billion euros, or 101.9 pct of GDP this year and 221.547 billion euros, or 98.9 percent of GDP, in 2008.

Caption: FinMin George Alogoskoufis unveils the 2008 draft state budget on Monday, Oct. 1, 2007. ANA-MPA / ALEXANDROS BELTES

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