The Organization for Economic Co-operation and Development (OECD) has recommended that Greece carry out reforms, in its latest economic outlook report for June 2015. In its report, the OECD has revised its initial 1.8% GDP growth rate for 2015 to 0.1% and estimates that there will be a 3.4% fiscal gap in the Greek budget.
Overall, the OECD is pessimistic regarding Greece’s macroeconomic performance in 2015 and expects growth to reach 0.1% in 2015 and 2.3% in 2016. It also predicts a 3.4% budget deficit for 2015 and 2.8% in 2016. Unemployment is also expected to remain high, with the OECD estimating it will drop from 25.7% in 2015 to 24.7% in 2016.
Additionally, the OECD report notes that there will be a 1.4% rate of deflation in 2015, which will give way to a 0.3% inflation rate in 2016. Greece’s public debt has also be estimated to be about 180% of the GDP.
The OECD underlines that tax system and tax collection reforms are essential to raise revenues, while further pension reforms would help contain spending. Structural reforms to lower barriers to competition and investment may boost exports and create more higher-quality jobs. Finally, the report asserts that social policy reforms should aim at a fair sharing of the costs and benefits of adjustment.
The OECD’s summary of the economic forecast for Greece
The OECD’s full economic forecast
