01/12/2010 09:36
The Finance Ministry is satisfied by the flow of forecasts on the island’s economy by foreign rating agencies. The recent Standard and Poor’s report and the positive revision of the IMF and the European Commission’s estimates bring the foreign agencies’ forecasts closer to those of the Finance Ministry.
The Ministry and its technocrats were in an exceptionally difficult position yesterday due to the divergent fiscal and macroeconomic estimates and the real figures.
A year later, things seem to have changed.
Macroeconomic forecasts
The European Commission’s autumn forecasts adopt fully the Ministry’s macroeconomic estimate for a growth rate of 0.5%, revising upwards the previous estimate for a shrinkage of 0.4%.
Recently, the IMF proceeded with a similar revision too. At first, it anticipated a zero growth rate but now it supports that the GDP growth will reach 0.4% this year.
On the other hand, the Central Bank expects that economy will shrink by 0.5%.
The forecasts for 2011 are closer. They talk about an increase in GDP by more than 1%.
The EU and the Finance Ministry expect a growth of 1.5%, the CB of 1.3% and the IMF of 1.8%.
In 2012, the EU expects a growth of 2.2%, the IMF of 2.5% and the Finance Ministry of 3.2%.
Fiscal forecasts
What is more important for the Ministry is the convergence of the estimates on the public finances. The improvement of the macroeconomic conditions affected the course of the public finances.
It is worth noting that S&P adopted fully the Finance Ministry’s forecast that the deficit will fall to 6% in 2010 and to 4.5% in 2011.
The Commission also expects that the deficit will reach 5.7% of GDP in 2011, slightly higher than the government’s target for a deficit of 5.4%.
It is estimated that if no measures are taken, the fiscal deficit will remain at the same level in 2012 against a previous forecast for an increase of 7.7%.
The IMF’s forecasts are similar; it expects that with no measures, the deficit will stands at 5.5% of GDP in 2011 and 2012.
On the other hand, the Central Bank had stated a month ago that this year’s forecast for a deficit of 6% is optimistic since the deficit will reach 7% in 2011.
The Ministry and its technocrats were in an exceptionally difficult position yesterday due to the divergent fiscal and macroeconomic estimates and the real figures.
A year later, things seem to have changed.
Macroeconomic forecasts
The European Commission’s autumn forecasts adopt fully the Ministry’s macroeconomic estimate for a growth rate of 0.5%, revising upwards the previous estimate for a shrinkage of 0.4%.
Recently, the IMF proceeded with a similar revision too. At first, it anticipated a zero growth rate but now it supports that the GDP growth will reach 0.4% this year.
On the other hand, the Central Bank expects that economy will shrink by 0.5%.
The forecasts for 2011 are closer. They talk about an increase in GDP by more than 1%.
The EU and the Finance Ministry expect a growth of 1.5%, the CB of 1.3% and the IMF of 1.8%.
In 2012, the EU expects a growth of 2.2%, the IMF of 2.5% and the Finance Ministry of 3.2%.
Fiscal forecasts
What is more important for the Ministry is the convergence of the estimates on the public finances. The improvement of the macroeconomic conditions affected the course of the public finances.
It is worth noting that S&P adopted fully the Finance Ministry’s forecast that the deficit will fall to 6% in 2010 and to 4.5% in 2011.
The Commission also expects that the deficit will reach 5.7% of GDP in 2011, slightly higher than the government’s target for a deficit of 5.4%.
It is estimated that if no measures are taken, the fiscal deficit will remain at the same level in 2012 against a previous forecast for an increase of 7.7%.
The IMF’s forecasts are similar; it expects that with no measures, the deficit will stands at 5.5% of GDP in 2011 and 2012.
On the other hand, the Central Bank had stated a month ago that this year’s forecast for a deficit of 6% is optimistic since the deficit will reach 7% in 2011.
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