Greece: IMF Fifth Review

Greece: Fifth Review Under the Extended Arrangement Under the Extended Fund Facility, and Request for Waiver of Nonobservance of Performance Criterion and Rephasing of Access; Staff Report; Press Release; and Statement by the Executive Director for Greece

Significant progress has been made toward rebalancing the economy. The fiscal primary and external current account balances are in surplus. 

But a number of challenges remain to be overcome before stabilization is deemed complete and Greece is on a sustained and balanced growth path.

Fiscal gaps are projected for 2015–16, and public debt remains very high.

P. Thomsen's answers to the IMF Survey

Back in mid-2012, when the current government coalition took office, there were widespread doubts about Greece’s future in the euro zone. The government’s determined policy actions since then have taken “Grexit” off the table, and we are now seeing signs of economic stabilization

Overall, ...developments suggest grounds for cautious optimism, and we expect growth to turn positive in 2014, for the first time since 2007. 

It is too early to declare victory though, as policies need to build on what has been achieved, to improve confidence further and lay the ground for the recovery to turn into sustained and robust growth. In this context, it is imperative to address Greece’s competitiveness problem by accelerating structural reforms, 

However, product prices have not declined commensurately with wages, and therefore Greece remains relatively uncompetitive.... The lack of adequate price adjustment reflects primarily structural rigidities in product and labor markets.