IMF staff have published today their review of the stand-by arrangement with the IMF which will no doubt make G-PAP and even some of our journos happy. The full report can be read here.
In summary they suggest that reforms are proceeding according to plan and economic growth has only been affected to the extent they had planned for.
I sincerely hope they are right.
However, they also note the following risks to the plan:
- Out-of-control inflation - only to be expected when one racks up VAT in an economy with a very rigid labour market.
- Healthcare and local authority expenditures not entirely under control - primarily because we still don't know what they are
- Publicly owned enterprises are invoking public sector guarantees on their debt.
- The pensions reform bill is on track but we don't actually know what savings it will achieve because the actuaries are taking forever to crunch the numbers - not their fault really as the system is too complex in the first place.
- Greek banks are still locked out of the interbank lending markets
- Too many naysayers are still talking about default - credibility is not yet restored.