Greece Predicts End to Recession in 2014

Hoping for end to six-year slump

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Greece is predicting it will emerge from a six-year recession in 2014, a sign it may finally be recovering from its debt crisis, BBC reports.

The Greek government made the forecast in a first draft of its 2014 budget, which predicted an economic growth rate of 0.6 percent. Twice bailed-out Athens also confirmed it would post a budget surplus before interest payments this year for the first time in more than a decade, and its battered economy won a vote of confidence from billionaire American investor John Paulson, the Guardian reports.

Greece’s budget prediction reflects cautious optimism about the country’s economy, which has shrunk by about a quarter since its peak in 2007 and thrown more than one in four out of work. BBC reports that tourism is picking up, leading to a rise in seasonal employment, and manufacturing is also showing some signs of recovery.

But analysts remain wary. Diego Iscaro, principal economist at IHS Global Insight, told BBC he was still expecting the economy to contract between 0.8 percent and 1 percent next year. “To expect the economy to grow next year is slightly optimistic and quite risky,” he said. “If it performs less well than expected it will have a knock-on effect on taxes and spending and Greece will have to renegotiate its fiscal target.”