ATHENS, Greece (AP) — Greece's economy will remain in recession next year, causing it to miss its original deficit reduction targets, figures in the draft budget for 2012 showed Monday.
Greece's debts are projected to reach 172.7 percent of gross domestic product in 2012 while the deficit will drop to 6.8 percent, above the 6.5 percent originally agreed with international bailout creditors.
The government said, however, that it will finally post a primary surplus — growth before interest payments on outstanding debts are taken into account — of euro3.2 billion, or 1.5 percent of GDP.
Greece relies on regular payouts from a euro110 billion ($150 billion) bailout from other eurozone countries and the International Monetary Fund, and was granted a second, euro109 billion bailout in July, although the details of the latter remain to be worked out.
Debt inspectors from the IMF, European Central Bank and European Commission, known as the troika, are in Athens reviewing reforms to see if Athens qualifies to receive the next euro8 billion installment of its bailout. Without it, Greece will run out of funds in mid-October.
The troika had suspended its review in early September over talk of missed targets and delayed implementation of reforms, and the government announced new austerity measures in the last few weeks, including pension cuts and extra taxes on property.
The 2012 draft budget "is within the framework which has been agreed with the troika and is supported by the package of measures which have already been decided on and announced" and which will be voted on by the end of the month in Parliament, Finance Minister Evangelos Venizelos said in a statement.
"The 2012 budget completes a dense and difficult effort of fiscal adjustment which, from a primary deficit of euro24 billion in 2009, reaches a primary surplus of euro3.2 billion in 2012," he said.
Next year's budget also covers a 0.7 percent of GDP gap in this year's budget, which the government attributes to a recession that will reach 5.5 percent of GDP this year, instaed of the 3.8 percent the economy had been forecast to contract by.