World Bulletin / News Desk
Greece will frontload budget cuts to achieve a primary surplus in 2013 for the first time in many years but its economy will shrink for a sixth consecutive year by up to 4 percent, a government official told Reuters.
The government will unveil a draft budget draft later on Monday, aiming to satisfy international lenders but expected to prolong the economic pain of the Greek people.
It will include more cuts in public sector pay, pensions and welfare benefits as part of an 11.5 billion euro ($14.8 billion)austerity package of savings that will be spread out over the next two years.
Greece's economic output has declined by a quarter since 2008 in a vicious spiral of austerity and recession, with the most heavily indebted euro zone nation repeatedly falling behind in meeting targets set under its EU/IMF bailouts and at risk of being forced out of the single currency area.
The official, who spoke to Reuters on condition of anonymity, said Athens will frontload a big chunk of the new spending cuts under negotiation with inspectors from the troika of the European Union, European Central Bank and International Monetary Fund.
"The draft budget will include 7.8 billion euros in cuts for 2013," the official said.
Belt-tightening has taken a toll on economic activity, suppressing domestic demand and driving the jobless rate to a record 24.4 percent.
The official said the budget will aim for a primary surplus of 1.1 percent of gross domestic product (GDP). He said GDP was expected to contract by 3.8 to 4 percent next year.
This year's primary deficit - which excludes debt servicing costs - is expected to exceed a targeted 1.0 percent of GDP. The finance ministry sees the primary deficit at 1.5 percent of national output in 2012.
After months of disagreement, OPEC members last week hammered out a deal to cut oil output for the first time in eight years.
Ali Shareef al-Emadi predicted growth of 3.4 percent in 2017, in line with an International Monetary Fund estimate and up from a projected 3.2 percent this year.
"Many citizens in advanced economies are facing heightened uncertainty, lamenting a loss of control and losing trust in the system," Carney said in a speech at Liverpool's John Moores University.
European stock markets are also set for a weak start, with Italy underperforming as investors brace for turbulence and political crisis in the euro zone's heavily indebted third-largest economy.
The euro tumbled on Monday after Italian Prime Minister Matteo Renzi said he would resign as he conceded defeat in a referendum over his plan to reform the constitution
Rouhani's 2017-2018 budget is based on oil prices of $50 per barrel, up from $40 last year, with a focus on unemployment, water resources, railways and the environment.
Turkish parliament has already ratified the deal on construction of ‘TurkStream’ natural gas pipeline
The September rate was revised to 9.9 percent from the 10 percent first given last month.
Many analysts had expected the producers' cartel to fail to reach a deal as major players like Iran, Iraq and Saudi Arabia remained divided ahead of the meeting.
The report, which collects views of economists, business contacts and others in the 12 Federal Reserve districts in preparation for the monetary policy meeting next month, noted improved retail sales and home construction in most regions.
If the cartel does not reach a deal to cut output, prices could fall below $40 a barrel
European air travel giant Lufthansa has been battling its own pilots over pay and conditions for more than two years.
Failure to get an accord on Wednesday could send oil prices tumbling and deal a further blow to the credibility of the 56-year-old Organization of the Petroleum Exporting Countries.
Around midday, shares in Italian lenders Unicredit and Banco Popolare were down 4 percent compared with Friday's closing levels.
Officials on Friday's said the tie-up between the Hong Kong and Shenzhen markets will start on December 5.