The International Monetary Fund has released the latest installment of Greek emergency loans, and lauded the country’s cost-cutting progress.
However the IMF also warned of tough times ahead for Greece, and debt-laden Ireland.
The International Monetary Fund on Friday released a 2.5 billion euro ($3.3 billion) installment of loans for Greece, and praised the country’s progress with stringent austerity measures, while also warning of tougher times to come.
This was the latest tranche of the country’s 110 billion euro loan package that rescued Athens from bankruptcy in May; so far Greece has received 10.58 billion euros from the EU and the IMF.
Athens had to embark on a series of strict spending cuts to qualify for the loans.
“The Greek authorities are to be commended for their determined implementation of difficult and ambitious macroeconomic policies and structural reforms,” senior IMF official Murilo Portugal said. “Inflation is falling and competitiveness improving … [the] overall fiscal adjustment to date has been impressive.”
However, the changes have come at a price, recognized both by disgruntled Greeks protesting the cuts, and by the IMF’s economic experts.
The organization warned that a cocktail of recession, high interest rates and draconian budget cuts would cause the country’s economy to shrink by 3 percent in 2011, more than originally predicted.
The IMF also said Athens must do more to accelerate structural reforms, particularly in the tourism, retail, and labor markets.
