EU Slashes Greece GDP Growth Forecast as Political Uncertainty Weighs

        Write to Stelios Bouras 


        ATHENS--The European Commission on Tuesday sharply lowered its 
forecast for Greece's economic growth this year as political uncertainty and 
tighter financing conditions weigh on the economy. 


        Political uncertainty stemming from a decision in Greece to hold snap 
elections hit the economy that emerged from a six-year recession last year, 
prompting the commission to cut its growth forecast for Greek gross domestic 
product in 2015 to 0.5% from a previous estimate of 2.5%. 


        The European Union's executive arm also cut its Greek economic growth 
forecast for 2016 to 2.9% from 3.6% previously, it said in its spring report. 



        "The positive momentum has been hurt by uncertainty since the 
announcement of snap elections in December. The current lack of clarity on the 
policy stance of the government vis-a-vis the country's policy commitments in 
the context of the EU/International Monetary Fund support arrangements worsens 
uncertainty further," the commission said in the report. 


        Since being elected in January on an anti-bailout policy, Greece's 
leftist-led government has been locked in negotiations with international 
creditors over its next slice of bailout assistance, as concerns rise over the 
country's future in the single currency area. 


        The uncertainty and slowdown in the country's economic recovery is 
hurting state finances, the commission added, forecasting a general government 
deficit this year of 2.1% of GDP, compared with a previous estimate for a 
surplus of 1.1% of GDP. 


        Write to Stelios Bouras at stelios.bouras@wsj.com 


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        May 05, 2015 05:00 ET (09:00 GMT)



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