Canadian Manufacturing

Greece to enter sixth year of recession

Greece's government will continue to run at a loss despite waves of spending cuts and tax hikes over the past two years



ATHENS—Greece’s draft budget submitted shows the country is set for a sixth consecutive year of recession, with its economy predicted to contract by 3.8 per cent in 2013.

This year’s recession is expected to see the economy shrink around 6.5 per cent, the document said. Unemployment is predicted to rise to 24.7 per cent in 2013 from an average 23.5 per cent in 2012.

The budget forecasts Greece’s government will continue to run at a loss despite waves of spending cuts and tax hikes over the past two years.

It estimates the government will post a primary deficit, which excludes interest rates paid on existing debt, of 1.4 per cent of GDP this year. That’s worse than the 2012 budget’s forecast for a primary surplus of 1.1 per cent of GDP.

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