U.S. Markets

Greece cuts 2017 growth forecast

A port worker makes his way at the commercial terminal of the port of the northern city of Thessaloniki, Greece August 11, 2016. Picture taken August 11, 2016. REUTERS/Alexandros Avramidis

ATHENS (Reuters) - Greece cut its 2017 growth forecast to 1.8 percent from 2.7 percent, according to a mid-term budget plan unveiled late on Saturday, driven by uncertainty caused by delays in concluding the latest review of bailout reforms.

Greece and its foreign creditors reached a deal on reforms in early May after six months of tense negotiations but the wrangling hurt economic activity. The Greek central bank governor had warned the delays could hobble economic recovery.

The 2018-21 plan was submitted to parliament along with the reform deal which lawmakers need to approve.

It forecasts growth of 2.4 percent in 2018 and 2.6 percent in 2019. The projections are lower than those of the EU Commission, which also cut its growth estimates last week to 2.1 percent this year from 2.7 percent forecast three months ago.

GDP growth was also set to shrink to 2.5 percent in 2018 from previously estimated 3.1 percent, the Commission said.

The government hopes that legislating the new measures by May 18 will allow its euro zone partners to approve the deal when they meet on May 22 and release a new tranche of bailout funds.

It also wants the ministers to sign off on the review to qualify for inclusion in the European Central Bank’s quantitative easing program and return to bond markets after three years of isolation.

Reporting by Karolina Tagaris; Editing by Marguerita Choy