Jordan Weissmann reads the latest IMF report on Greece and calls this one of the saddest passages you’ll ever read about a developed country:
Greece will continue to struggle with high unemployment rates for decades to come. Its current unemployment rate is around 25 percent, the highest in the OECD, and, after seven years of recession, its structural component is estimated at around 20 percent. Consequently, it will take significant time for unemployment to come down. Staff expects it to reach 18 percent by 2022, 12 percent by 2040, and 6 percent only by 2060.
IMF staff projects this astronomical unemployment rate despite the fact that Greece’s working-age population is expected to decline by 10 percentage points over the next few decades. The IMF also projects that by 2060 Greece’s government debt will increase to 250 percent of GDP; financing needs will increase to 70 percent of GDP; and real GDP growth will be stuck at 1-2 percent.
That’s 45 years of projected misery. And only if nothing else goes south during that time.
The most remarkable part of all this is how quickly the IMF has changed its official mind. Last year, during Greece’s most recent funding crisis, the IMF projected that everything would soon be hunky dory. Now, a mere 11 months later, they’re projecting decades of catastrophe. Despite their claims that much has changed over the past year, one might well be suspicious that the 2015 projections were massaged no small amount to make them politically palatable.