News

Greek Parliament passes 2016 budget that forecasts contraction next year

ATHENS, Greece – Greece’s Parliament has approved the 2016 budget that includes deep spending cuts and tax hikes amid economic recession.

The budget passed early Sunday, 153-145, with 2 lawmakers absent in the 300-member Parliament. The vote was strictly along partisan lines.

The government forecasts zero economic growth this year and a contraction of 0.7 per cent in 2016. Earlier, it had predicted declines of 2.3 per cent and 1.3 per cent, respectively.

Prime Minister Alexis Tsipras told Parliament that growth would resume in the second half of 2016 and a strong tourist season could avoid a recession altogether.

Despite spending cuts of around 2 billion euros ($2.18 billion) and a similar amount in tax hikes, debt is forecast to grow to 327.6 billion euros ($356 billion) or 187.8 per cent of GDP from 180.2 per cent in 2015.