Greek public debt has a favorable outlook by 2060, despite its increase during the pandemic crisis, the Organization for Economic Cooperation and Development (OECD) said in a report.
Under the base scenario of the survey, Greece is the only OECD member-state that does not need to take fiscal measures to avert any increase in its public debt. The Paris-based organization attributed this conclusion partly to a decline in public pension spending following recent legislative reforms and partly to of the relatively high initial structural primary surplus of the country. The survey noted that any fiscal pressure because of expected higher capital spending in the future and higher healthcare spending will be counterbalanced by a reduction in pension spending and other factors affecting the country’s public debt.
“With the exclusion of Greece, where a large fiscal adjustment has already been made after the Big Recession, all OECD member-states should raise their tax revenue to avert any increase in their public debts,” the OECD said.
The OECD predicts that the Greek economy will have an average annual growth rate of 1.3% in the 2020-2030 period and 1.2% in the 2030-2060 period, compared with growth rates of 1.3% and 1.1%, respectively in the Eurozone.
However, the OECD noted that Greece and other countries with high public debt levels could fact increased fiscal pressure in case that interest rates would rise significantly from current levels.