Greece sticks to bailout targets in draft budget

Athens - Greece stuck strictly to the targets enshrined in its international bailout programme in unveiling a draft budget which sees the economy shrinking by 1.3% in 2016 before returning to growth in 2017.

The draft budget, which was submitted to parliament by the finance ministry, sees a primary fiscal surplus before debt service costs of 0.5% of GDP next year after a 0.24% primary deficit in 2015.

Central government debt is seen peaking at 197.7% of gross domestic product in 2016, including new loans from Greece's €86bn third bailout agreed in August.

The draft budget maintained the official estimate that gross domestic product will contract by 2.3% this year, although officials have said the recession may have been shallower and the figure could be adjusted in the final budget.

The 2016 budget foresees a general government deficit of 2.3% of GDP. It said the government expects a gradual return to bond market access "in the coming years" but set no target date.