Greece's economy, expected to slump for a sixth straight year in 2013, may begin to recover in 2014, the country's finance minister said on Saturday. "I believe that after the second half of 2013 we will be able to see growth, with positive rates of change in GDP on a quarterly basis or month-by-month," Finance Minister Yannis Stournaras told Imerisia newspaper on Saturday.
Wage cuts and tax increases will keep the economy in a sixth consecutive year recession in 2013, with national output projected to shrink by 4.5 percent, based on official estimates. The economy has contracted by a cumulative 24 percent since 2008, according to the country's central bank.
"Whatever positive we achieve henceforth will be like rain falling in the desert, given that the country will be waking up from a recession of unprecedented duration," Stournaras said. In a separate speech to a medical conference, Stournaras said Greece would use 16 billion euros to recapitalise banks next week, and another 7.2 billion in the first quarter, after international lenders said they would resume aid payments on Thursday.
Euro zone partners and the International Monetary Fund agreed to unlock 49.1 billion euros in aid by the end of March. The decision to release the long-delayed instalment came after Athens passed austerity measures and completed a debt buyback. Greek banks will get the capital injection from the Hellenic Financial Stability Fund (HFSF), which has already provided 18.5 billion euros to the country's four biggest lenders.
"Banks will be able to boost their portfolios with new, strong bonds from the EFSF (European Financial Stability Facility), without accessing the (central bank's) ELA (emergency liquidity assistance) mechanism," Stournaras told the conference. Athens is aiming at a primary budget surplus next year.