2024 will end with an impressive economic performance including an almost balanced budget, as the deficit, based on the latest estimates of the economic staff, is expected to fall below 1% of GDP.
The primary surplus is also projected to fluctuate at higher levels than initial estimates, around 2.5% of GDP from 2.1% of GDP.
The updated figures are expected to be included in the final draft of the 2025 budget to be tabled next week (probably on November 20) in Parliament.
The particularly satisfactory course of revenues due to indirect taxes but also due to the measures adopted with the aim of combating tax evasion, boost state revenue, contributing to the further reduction of the deficit. Based on the latest estimates, the deficit this year will fall below 1% of GDP (probably close to 0.9% of GDP), while a further decline to 0.6% of GDP is predicted for 2025.
This specific element is of particular importance for the image of the Greek economy abroad, if one considers that in the past Germany was the country that made special reference to Greece’s high deficits. Now the German economy is characterized by weak growth, capital outflow and of course it is faced with a political crisis which endangers the course of Europe’s largest economy.
Primary Surplus
Regarding the primary surplus side, the latest estimates of the Ministry of National Economy and Finance show that it will fluctuate at higher levels than the initial forecast of 2.1% of GDP this year. As the Minister of National Economy and Finance Kostis Hatzidakis pointed out “the result will be greater than the already high target of 2.1%” predicting that “it will reach 2.5%, possibly even more.” For 2025, it is predicted that the primary surplus will reach 2.5% of GDP.
However, it should be pointed out that the higher primary surplus does not imply more room for new benefits until the end of the year, due to the activation of the new fiscal rules (for all EU member states) and the limits which have been set for the ceiling increase in net primary expenditure.
Under the new rules, any excess of the primary surplus in the budget should be directed to the reduction of public debt and the commitment to increase net primary expenditures by 3.7% next year should be kept.
