Greece, IOBE report raises hopes on growth and debt

The recession may not be as bad as originally thought after all this year, but unemployment will be even worse, according to adjusted forecasts presented on Monday in Athens by the Foundation for Economic and Industrial Research (IOBE), which highlighted the view that it is only through growth that the Greek debt can become sustainable. In its quarterly report IOBE said it now expects the country's gross domestic product to contract by 6.6% in 2012, against a forecast for a 6.9% contraction in the previous report, while the jobless rate has been revised from 23.6% to 24.2% for this year. "Greece will be able to service its debt around the end of the decade and without any further assistance by its creditors, besides some practical help that is common in such circumstances," IOBE Vice President Raphael Moissis said as reported by daily kathimerini. He stressed that what is important for the debt to be considered "sustainable" is not its GDP ratio but whether it has a declining course or not. According to the scenarios drafted by the foundation the course of the debt will start declining from 2013 onward.