Economy Watch — According to the IMF, Greece will suffer through another 45 years of economic hardship and that is only if there are no additional problems before that. Of course, things could improve, but only with the intervention of outside forces.
Of course, several economic analysts have noted how quickly the IMF reversed its prior opinion on Greece’s recovery. In 2015, the IMF projected that the nation’s economy would improve very quickly, and that prediction was made despite being in the middle of Greece’s most recent funding crisis.
Now, just 11 months later, the IMF believes Greece can do little to nothing to escape long-term financial disaster. Although the IMF asserts this re-evaluation is due to the large number of events that have occurred over the last year, economic analysts are skeptical that the 2015 projections may have been doctored in order to encourage support for the financing.
Moreover, the 2016 projection may be overly dire to gain traction in the IMF’s ongoing dispute with European lenders like Germany.
“Greece will continue to struggle with high unemployment rates for decades to come. Its current unemployment rate is around 25 percent, the highest in the OECD, and, after seven years of recession, its structural component is estimated at around 20 percent. Consequently, it will take significant time for unemployment to come down. Staff expects it to reach 18 percent by 2022, 12 percent by 2040, and 6 percent only by 2060.”
The International Monetary Fund staff projects that Greece’s terrible unemployment rates will persist for decades, despite the fact that its working-age population will decline by 10% over the next few decades. Worse still, the IMF also projects that Greece will increase its national debt to 250% of its gross domestic product (GDP) by 2060. The need for financing will increase to 70% of the nation’s GDP. Similarly, Greece’s real GDP growth will remain stagnant at around 1-2% year over year.
