According to the International Monetary Find (IMF) Greece has made a strong start in getting its finances in order but the government risks being over complacent about its ability to grow the economy in the medium term. Money was lent to Greece by the IMF and Eurozone members in exchange for far-reaching spending cuts and led to violent protests on the streets.
With further payments given to Greece last Friday reflecting the positive start the country had made in cutting its spending the IMF had to warn the Greek government not to be complacent about the country’s informal economy to keep the country growing in the future.
The IMF warned ‘risks exist on the revenue outlook as the economy will be contracting, and spending is not under full control in sub national entities of government.’
But despite the stringent cuts the IMF said the recession in Greece is unfolding in line with expectations although inflation is higher than expected from indirect tax hikes.