Greece’s budget deficit is likely to amount to 5.4 percent of the country’s gross domestic product (GDP) in 2012 if the government’s debt swap program is successful, according to the 2012 budget draft.

However, if the program is not implemented, the budget deficit may hit 6.7 percent of the country’s GDP.

In 2011, the deficit is likely to reach 9 percent, the Greek government earlier said.

Greece’s private sector involvement (PSI) debt swap envisages a 50 percent writedown in the face value of the debt or about 100 billion euros.

The 2012 economic recession is expected at 2.8 percent of the GDP, which is higher than the earlier forecast 2.5 percent. However, according to the latest forecasts issued by the European Commission, the GDP is likely to drop by more than 5.5 percent.

Greece is backing its 360 billion euro debt through the loan support of the European Union and the International Monetary Fund.

Negotiations with the lenders’ representatives on a new aid project for Greece are currently under way. The following project envisages a partial writedown of the Greek debt and further backing of the country totaling up to 130 billion euros.

RIA Novosti