Fri Sep 20 06:42:35 UTC 2024: ## Greece’s Debt to GDP Ratio to Increase by 5-6 Percentage Points Due to New Accounting Rules

**Athens, Greece** – Greece’s debt-to-GDP ratio is set to jump by 5-6 percentage points due to a new accounting rule imposed by Eurostat, the statistical office of the European Union. The rule mandates the inclusion of deferred interest on government debt, estimated at approximately €12-12.5 billion until the end of 2023.

This change will significantly impact Greece’s debt-to-GDP ratio, bringing it close to 167.5% for fiscal year 2023, up from the current 161.9%. While the impact is purely accounting and doesn’t affect the actual budget, it will create a perceived deterioration of Greece’s financial position.

Eurostat’s decision is expected to be reflected in the final estimates of GDP and debt figures, to be released on October 17. While the registration is considered a given decision, there’s a possibility that the integration could be postponed to March 2024.

Despite the increase in the debt-to-GDP ratio, the change does not impact Greece’s fiscal position as the amounts have been recorded in all previous financial years. Furthermore, there will be no immediate impact on the country’s cash flow, as the payment of the deferred interest is scheduled to begin in 2032 at a rate of €1-1.2 billion per year.

The change also does not affect the debt reduction target under the new Stability Pact, as it is being applied retroactively from 2012.

This development raises concerns about Greece’s perceived financial health, despite the accounting nature of the change. However, it is important to note that the impact is mainly on the debt-to-GDP ratio and does not affect the country’s actual budget or cash flow in the near future.

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