国际英语新闻：Greek Bank governor warns about economy shrinking further

ATHENS, March 22 (Xinhua) -- The Greek economy will shrink by two percent this year, more than the earlier expectation of between 0.3 percent and 1.2 percent, Bank of Greece Governor Giannis Provopoulos warned here on Monday.

"The Greek economy has fallen into a vicious circle. Unfortunately the developments of the past few months have verified the negative projections and damaged confidence to the future of our economy," Provopoulos said.

The only way out of this crisis is through urgent drastic changes, decreases in the budget deficit and a turn to growth projects, he stressed, while presenting the bank's yearly monetary policy report to the parliament, which will on Monday evening hold another debate on the Greek Stability and Growth Program.

According to the report, the deficit reached 12.9 percent after all last year and the public debt is estimated at 115 percent of GDP.

The budget deficit in the first two months of 2010, though, shrank by 77.3 percent to 904 million euros (1.22 billion U.S. dollars), it was announced by the Greek Finance Ministry, as a positive sign for the future.

In the same period last year the deficit stood at 3.9 billion euros.

The budget revenues in the first two months this year increased 13.2 percent, which is higher than the target of 7.1 percent set by the government, while expenses decreased 9.6 percent and the target was 3.5 percent, the ministry said in the announcement.

The inflation will further rise to three percent of the GDP, " if only the hikes in indirect taxes will not be eventually paid by consumers," it was warned in the Bank of Greece report.

In order to change the negative trend, the Greek government has to implement without wasting time the necessary reforms to reduce the deficit and focus on development, the report concluded.