ATHENS (Reuters) - Greece's economy will suffer a less severe recession this year than its international lenders assumed in drafting the country's new bailout programme, Finance Minister Euclid Tsakalotos said on Tuesday.
Tsakalotos gave no figures and said the draft 2016 budget announced on Monday had stuck to the bailout assumptions of a 2.3 percent economic contraction this year followed by a 1.3 percent shrinkage in 2016 before growth resumes in 2017, but it had more encouraging indications.
"Our projections for the third quarter are much better than the projections that we had in August. That is what led the prime minister to say yesterday that we can return to growth (in the second half of 2016)," he told parliament in a debate on the government's four-year programme.
"We could not include that in the draft budget yesterday because we don't have the official projections for the third quarter but it's an estimate. We feel that we have persuaded the institutions that the results will be better so we can be more optimistic," he said.
The International Monetary Fund reiterated the creditors' gloomier forecasts in its half-yearly World Economic Outlook unveiled on Tuesday, based on data collected up to Aug. 12, just before Greece's third bailout was clinched.
That included a 5.4 percent year-on-year fall in gross domestic product in the fourth quarter due largely to capital controls imposed in late June to halt deposit flight and stabilise Greek banks.
However, tourism has enjoyed a record season and consumer spending fell less sharply than expected in July as economists believe Greeks used cash stashed at home or deposited abroad to help cover their household needs.
Officials said there might be changes to the baseline growth assumptions when the final budget is presented in late November.
(Reporting by Lefteris Papadimas; Writing by Paul Taylor; Editing by Tom Heneghan)