“There is no doubt that the government is meeting its [primary surplus] targets for 2018-2019 and the discussion is now focused only on the size [of surplus] that will allow tax reductions and focused interventions on spending,” a Greek government official told reporters on Thursday.
Speaking after staff-level talks between the government’s economic team and the heads of the institutions’ missions in Athens on fiscal issues, the official noted that the IMF had revised its estimate for this year’s primary surplus upwards, to 3.5 pct of GDP from 2.9 pct of GDP, fully accepting Greek estimates.
He ruled out the possibility of an early reduction of the tax-free allowance threshold, adding that all agreements (cuts in pensions and the tax allowance in 2019 and 2020, respectively) will be implemented. However, he noted that the agreement also envisages a fiscally neutral result because of the positive measures to be announced by the government.
The government official said the government will review its estimates for the country’s GDP growth rate this year to 2.0-2.1 pct, noting that these revisions were taken into account for the agreement reached with the institutions on fiscal issues.
He expressed his certainty that a staff level agreement would be reached in time.