Monday, October 1, 2012

Greek 2013 budget sees sixth year of recession: source

(Reuters) - Greece will frontload budget cuts to achieve a primary surplus in 2013 for the first time in many years but its economy will shrink for a sixth consecutive year by up to 4 percent, a government official told Reuters.

The government will unveil a draft budget draft later on Monday, aiming to satisfy international lenders but expected to prolong the economic pain of the Greek people.

It will include more cuts in public sector pay, pensions and welfare benefits as part of an 11.5 billion euro ($14.8 billion)austerity package of savings that will be spread out over the next two years.

Greece's economic output has declined by a quarter since 2008 in a vicious spiral of austerity and recession, with the most heavily indebted euro zone nation repeatedly falling behind in meeting targets set under its EU/IMF bailouts and at risk of being forced out of the single currency area.

The official, who spoke to Reuters on condition of anonymity, said Athens will frontload a big chunk of the new spending cuts under negotiation with inspectors from the troika of the European Union, European Central Bank and International Monetary Fund.

"The draft budget will include 7.8 billion euros in cuts for 2013," the official said. Read More