Greece drafts budget for 2006 : economy growth by 3.8 percent expected

Greece's economy will grow by 3.8 percent next year, while the budget deficit will fall to 2.8 percent of gross domestic product, according to the draft 2006 state budget presented Monday.

Alogoskoufis said growth for 2005 was expected to reach 3.6 percent of GDP _ the highest in the 12-state euro zone _ while the budget deficit will be just over the 3-percent limit dictated by EU rules, at 3.6 percent.

Next year, the deficit will be at 2.8 percent of GDP, Alogoskoufis said. Bloated by spending on the Athens Olympics, the 2004 deficit soared to more than double the ceiling allowed by the EU, at 6.6 percent, a figure announced by eurostat last week and confirmed by Alogoskoufis Monday. The minister said the final bill for the most expensive Games in history _ preliminarily set at Ђ13 billion (US$15.5 billion) _ would be announced when the final 2006 budget is tabled later this year, the AP reports.

The draft 2006 budget allows for unemployment falling to 9.8 percent, from an estimated 10.4 percent in 2005, and inflation standing at 3.2 percent compared to an estimated 3.5 percent for 2005. am