Greece, Ireland, Finland and Luxembourg are the most rapidly growing economies in the EU-15, Greek Economy and Finance Minister George Alogoskoufis said on Thursday.

Presenting the ministry's report on current developments and prospects of the Greek economy, Alogoskoufis noted that Greek economy's performance has proved wrong all pessimistic forecasts over an economic slowdown after the Athens 2004 Olympic Games. The Greek minister stressed that GDP grew by 4.3 pct in 2006, up from a 2.7 pct growth rate in the Eurozone, while GDP grew by 4.6 pct in the first quarter of 2007 in Greece compared with a 3.0 pct growth rate in the Eurozone.

Alogoskoufis said the country's fiscal deficit was expected to fall to 2.4 pct of GDP this year, from 7.9 pct of GDP in 2004. Commenting on strong economic growth rates, the minister said they reflected a significant increase in investments and exports and not an expansive fiscal policy as in past.

Exports grew by 13.7 pct in 2005 and by 18.2 pct in 2006, while investments rose 12.7 pct last year contributing by 77 pct to Greek economic growth rate. Investments grew by 15 pct in the first three months of 2007, from 9.4 pct last year.

Alogoskoufis said fiscal consolidation was achieved without cutting social spending or reducing households' incomes. Greek households' real available income grew by 3.4 pct in 2005 and by 4.0 pct in 2006, leading to a 3.7 pct increase in private consumption over the two-year period.

Average inflation eased to 3.2 pct in 2006 from 3.5 pct in 2005, while unemployment dropped to 8.8 pct in the fourth quarter of 2006, from 11.3 pct in the first quarter of 2004. The Greek minister, however, acknowledged that unemployment remained high compared with the EU average and noted that one of the most significant problems facing the economy was that it did not create enough job positions.

Another big problem was social security, Alogoskoufis said, adding the problem would be addressed gradually over the next years.

He announced that the government would table to Parliament draft legislation to combating tax evasion, envisaging strict punishment of tax evaders and offering incentives to taxpayers. Another priority was promotion of a Social Cohesion fund aimed to support people living in poverty. Around 2.0 million people are considered poor currently in Greece and the fund will offer financial support totaling 2.0 billion euros. The government aims to cut poverty levels from 20 pct currently to 15 pct of the EU average, Alogoskoufis said.

He noted that Eurostat officials were currently in Greece to examine Greek GDP revised figures.

Source: Athens News Agency

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