IMF tells gov’t pursue reforms as growth decelerates

The International Monetary Fund urged the government pursue long-delayed structural reforms and maintain strict fiscal discipline, as the economic recovery after the 2013 crisis is gradually decelerating.

The island was bailed out by the Eurogroup and the IMF in a 10-billion-euro economic package program and achieved an economic growth of 4 percent in 2018.

But a report issued after the third post-program monitoring visit by the IMF said that the rapid recovery was expected to slow gradually, even as the outlook remained favorable.

It added that real Gross Domestic product is projected to grow at a still robust 3 to 3.5 percent in 2019 and 2020, supported by foreign-financed investment and private consumption.

“Over the medium term, growth is expected to ease to potential, as the investment boom dissipates and households step up debt servicing,” the report said.

The IMF said a window of opportunity for structural reforms was opening “and should be vigorously pursued”.