Greece undergoes surprise economic revival

Bailed-out economy performing better than expected, report shows

Greece, so long a symbol of economic problems and mismanagement in the eurozone, is undergoing a period of growth and revival that makes it one of the strongest performers in the economic area, a report from the International Monetary Fund, also known as the IMF, has revealed.

A decade ago, the country’s debt situation pushed Greece to the verge of economic collapse, and caused the biggest crisis yet seen within the 19 countries out of the 28 member states of the European Union countries that use the euro as their currency.

Bailout loans from the EU and IMF totaling more than 300 billion euros ($339 billion) and the imposition of harsh and deeply divisive financial rules kept the Greek economy afloat through the period, and now the country is a far healthier state with a more optimistic future outlook.

“The economic recovery in Greece is accelerating and broadening,”said the IMF’s executive board.

“A gradual recovery in private deposits has facilitated further relaxation of capital flow management measures, though bank lending remains negative.”

The IMF also said it expects Greece’s economy to grow 2.4 percent this year, a figure which would have seemed unlikely at the worst points of the country’s financial crisis.

Over 30 years, Greece had built up significant international debts and by 2009 its deficit was up to four times the amount permitted by EU rules.

That figure then grew five times in size, causing the IMF and EU to intervene with a bailout, and as a result, impose a strict and controversial austerity program on the country.

However, it appears that this has helped the situation to improve significantly, although in the medium term, this year’s economic expansion figure is likely to slow down to marginally above 1 percent.

The IMF has warned that despite positive signs such as falling unemployment, Greece still has the highest proportion of people out of work in the EU, and the country still faces plenty of economic challenges, internally and externally.

"Despite its hard-earned economic stability, Greece remains a country confronted by elevated vulnerabilities and weak payment discipline,”the report said, whilst also highlighting the challenges that could come as a result of the general election taking place in the country this year.

"There are risks from election year pressures on policies—such as to increase wages—as well as possible fatigue after years of cost cutting and reform efforts.

“The necessary adjustment away from the unsustainable policies that led to the crisis has imposed a heavy cost, despite efforts to protect the most vulnerable through targeted support—such as the guaranteed minimum income scheme."