Greece's economic recovery is seen picking up next year, boosted by tax cuts and growth measures, despite a slowdown in the global environment, according to a draft budget submitted to parliament on Monday.
The budget sees gross domestic product expanding by 2.8 percent in 2020, versus a previous forecast of 2.3 percent in the country's mid term plan. This year, however, Greece's growth forecast will miss the mark, with expansion seen at 2 percent, as opposed to the 2.3 percent target previously set.
The recently elected government is betting that tax cuts worth 1.2 billion euros will drive growth higher as the country's economic recovery remains weak. Policies adopted by the ruling conservatives are focusing on higher private and public sector investments, while meeting tough fiscal goals demanded by international creditors.
Economists describe the budget as being ambitious, adding that credit expansion and government investments must support the upturn. A pick up in credit growth is reliant on the ability of banks to reduce mountains of bad loans sitting on their books in a move that would free up money to finance investment and consumption spending.
The 2020 plan also foresees a drop in unemployment to 15.6 percent from 17.4 percent this year. It will be sent for review to the European Commission next week.