Greek Central Bank Head Projects Primary Surplus of 1.3 Percent of GDP, According to Report by Reuters

ATHENS (Reuters) – Greece’s central bank projects that the country will achieve a primary surplus of 1.3 percent of its gross domestic product (GDP) this year, according to Governor Yannis Stournaras in a recent interview with a Greek newspaper.

As part of the third international bailout agreement reached last summer, Greece’s target was a primary surplus of 0.5 percent of GDP for this year. Earlier this month, the bank had predicted a surplus of 0.9 percent.

"Fiscal challenges for 2016 have been addressed, and the forecast from the Bank of Greece is that the year will conclude with a primary surplus of 1.3 percent of GDP," Stournaras stated, as reported by the Sunday newspaper To Vima.

This surplus provides Greece with fiscal flexibility and means that the country won’t need to implement a contingency plan of automatic spending cuts that was established with international lenders in the event of missing fiscal targets.

Greece came dangerously close to exiting the eurozone in 2015 and has been enacting spending cuts and tax increases since 2010 to stabilize its economy. Stournaras emphasized that in order to end austerity measures, the country must progress on privatizations and the reforms previously agreed upon.