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Financial and economic crisis in Greece

11 August 2009 / 15:08:11  GRReporter
2506 reads

Greece's economical power is decreasing in 2009 with 1.7%, with unemployment increasing. In order for the country to exit the crisis, structural reformations are needed, as advice specialists from the International Monetary Fund.

"The reformations are required to boost the country's competitiveness," says the 60-page report.

Governmental experts have undertaken the responsibility of gradually improving budget discipline. IMF critiques consider it hardly possible that the government will be able to keep budget deficit at 3.7%; prognoses predict a deficit of 5.9%.

In case Greece is not able to improve its competitiveness, economy may reach stagnation that would last for couple of years. Still more, discrepancies have been found between data published in the report and these submitted by Karamanlis's office. The National Statistical Institute, on the other hand, has estimated the economical growth in the first half of the year at 0.3%.

In Cyprus, changes in the consumer price index have been detected. In July it has dropped to levels last reached 23 years ago. Statistics show that last month inflation on the island was minus 0.8% while in June it was plus 0.2%. This decrease is considered to be a result of the price reductions of clothes, shoes and appliances, which stayed low for a long time. For the first seven months of this year the consumer price index has risen with 0.5%, less than the same period of the previous year. The last time Cyprus experienced inflation lower than zero was in October 1986.

Tags: news economy markets
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