IMF uncertain Greece's debt is sustainable in the long term

Greece still faces an uphill struggle after the end of its bailout program and it is not clear that its public debt load will be sustainable in the long term, the International Monetary Fund said today.

An IMF report recommended a reduction in high direct taxes, which were imposed to right the country's public finances but also constrain growth.

The economy is expected to grow 2 per cent this year and 2.4 per cent in 2019 but will slow to 1.2 per cent in 2022. In the long term, the IMF report said, population aging will further hinder economic activity.

Greece's bailout programs end in three weeks' time. They were launched in 2010 when the country lost access to international bond markets after admitting it misreported key financial data.

From August 21, it will have to finance itself through bond sales, although a hefty cash buffer provided by European creditors last month means there will be no urgent need for the country to quickly raise funds.

The IMF, which contributed to Greece's bailout loans, said the European creditors' agreement to ease loan repayment terms ensures medium-term sustainability for the debt, while their further pledge to provide, if needed, additional future debt relief is "very significant and welcome."