Tokyo: The International Monetary Fund is happy for debt-battered Greece to have an extra two years to bring its runaway deficit in line with the demands of global creditors, the Fund’s chief said Thursday.

Christine Lagarde told a news conference in Tokyo it would take time before Athens is able to tame its budget overrun to agreed levels, in comments that add weight to the move to push back a deadline to 2016.

“Instead of frontloading heavily it is sometimes better — given the circumstances and the fact that many countries at the same time go through that same set of policies with the view of reducing their deficits — it is sometimes better to have a bit more time,” she said.

“This is what we’ve advocated for Portugal, this is what we’ve advocated for Spain and this is what we are advocating for Greece.

“I have said repeatedly that an additional two years was necessary for the country to actually face the fiscal consolidation programme.”

Greece is going through a painful round of austerity and spending cuts imposed on the country in return for promised loans and debt relief worth a total of about €347 billion (Dh1.6 trillion or $448 billion) since 2010.

The belt-tightening has forced Greece into its fifth year of recession, with its economy forecast to contract by 3.8 per cent in 2013.

Public debt

New figures on Thursday revealed one in four people is unemployed and many of those that do have jobs have seen their pay slashed.

The IMF says Greece’s public debt is expected to stand at 170.7 per cent of GDP, one of the worst fiscal pictures in the world and a figure expected to rise to nearly 182 per cent in 2013.

Greece has agreed with its creditors — the so-called Troika of the European Union, the European Central Bank and the IMF — that it will reduce its public deficit to 2.1 per cent of GDP by 2014.

It presently stands at more than three times that figure.

Athens is trying to persuade the Troika it is doing all it can to slash costs by €13.5 billion ($17.4 billion) over the next two years, with a €31.5-billion instalment from its bailout packages riding on that.

Once the austerity package is finalised later this month, Athens hopes to secure an extra two years to apply the relevant cuts, betting that its economy will have picked up steam by then.

The IMF has previously said there are some “good arguments” for pushing back the deadline, but Thursday’s comments in Tokyo marked the first time Lagarde had been so explicit.