Stoil Topalov

The Dow Jones did marginally better than last week, closing at 8277.3 points, a 0.1% rise. In London, the FTSE 100 closed the week at 4357.3, which is a 0.4% rise from last week. The Athens stock exchange rose 6.8% this week, closing on Friday at 2280.15 points.

The IMF warned that Greece is headed towards bankruptcy, and the Greek economy would need immediate changes. One of the main reasons for concern is national debt – expected to jump to 110% of GDP in 2010. The expert opinion is that if there is no immediate and stable progress over the coming months and year, the country will be unable to secure the necessary loans to pay the debt. The total amount the Greek government owes, including bonds, guarantees and third party debt is 317 billion euro. This means each Greek owes 31,700 euro. The IMF also noted that the budget deficit will expand, and likely reach 5% for 2009. The recommendations by the Fund include pension reform, freezing public sector wages, staff cuts in the public sector, financial transparency in local authorities, and tax reform.

The economic newspaper “Imerisia” reported some good news. First of all, automobile sales have started showing signs of revival, doubling in the first 15 days of May over the same period in April. The publication reported similar news from the real-estate sector, where demand is recovering, spurred by ever-falling interest rates and new measures by banks to design loan structures appropriate to the economic climate. According to a research by Greek company Re/Max, property prices in the first quarter of 2009 have remained largely similar to the prices in the last quarter of 2008.

In other economic news, the oil price closed the week at $60.93, after a week of new highs around $62. This is in expectation of the OPEC meeting coming up next week. The cartel has consistently cut supply in the last few years, however, due to the current economic climate, they are likely to keep things as they are for now.