Greek economic forecasts worse than expected

Greece's economic crisis is worse than previously thought, with both the recession and public deficit deeper than originally forecast. Athens is currently trying to meet austerity targets in order to receive more aid. Greek Finance Minister Yannis Stournaras submitted a new national budget to parliament on Wednesday, as lawmakers prepared to vote on a privatization drive aimed at meeting austerity targets set by the country's international creditors. According to the submitted budget, Greece's economy is expected to shrink by 4.5 percent in 2013, revised downward from the 3.8 percent contraction projected last month. The country's economy is expected to contract by 6.5 percent this year. Greece's public deficit is expected to stand at 5.2 percent in 2013, higher than the original forecast of 4.2 percent. Greece's total sovereign debt is forecast to be 189.1 percent of gross domestic product (GDP) in 2013. News of the slower than expected economic recovery comes as the Greek parliament prepared to vote on a set of privatizations aimed at raising 2.5 billion euros ($3.25 billion) in 2013. Troika negotiations Athens has been struggling for months to cut 13.5 billion euros from its budget, in exchange for a 31.2-billion-euro tranche of bailout money. Without the next tranche, Greece is expected to run out of money on November 16. The head of the Euro Working Group, which organizes eurozone finance minister meetings, told German public radio on Wednesday that the so-called "Troika" may extend the deadline for Greece's austerity targets. "It could be that (the goals) may be postponed by one year or two," Thomas Wieser said. The Troika is made up of Greece's international creditors - the European Commission, the European Central Bank (ECB), and the International Monetary Fund (IMF). Commission spokesman Simon O'Connor said that negotiations with Greece over its next bailout tranche had not yet been concluded, but were nearing an end. "We are continuously narrowing the number of open issues," said O'Connor, spokesman for the EU's economic affairs chief Olli Rehn. O'Connor's statement contradicted Greek Prime Minister Antonis Samaras, who had said on Tuesday that Athens had already reached a deal with the Troika.