Specifically, the Stability Program sent to Brussels by the Ministry of the Interior foresees average growth exceeding 2.5% (2.5% in 2024 and 2.6% in 2025), unemployment at pre-crisis levels (9.9% in 2025 ) and the debt to be reduced below 150% at the end of the next year.
Based on the plan, Greece will continue to grow at rates significantly higher than those of the EU, which is expected to have economic growth of 0.6%-0.8% in 2024 and 1.5% in 2024 according to the forecasts of the E.E. and the ECB. Therefore, with growth of 2.55% on an average annual basis for the two years 2024-2025, the convergence at the level of incomes will continue. A leading role in the two-year development will be played by the proper implementation of the Recovery Fund, which for this year alone will provide 1.2-1.3% of the total GDP growth of 2.5%.
Upwards
In addition to investment growth which will reach 9.1% for this year, a rate significantly revised from the 15.1% foreseen in the 2024 Budget, but with the prospect of growth reaching 14.4%, in 2025 drivers of growth will be private consumption, which is expected to grow by 1.6% in both 2024 and 2025, but also exports, which are also expected to grow by 3.7% this year and 4.9% next time.
Inflation is also expected to moderate further to 2.6% this year (versus 1.8% forecast in the Budget) and 2% in 2025. Employment is expected to continue to grow, albeit at a slower pace, by 0.8% in 2024 and 0.5% in 2025. The unemployment rate from 11.1% in 2023 is expected to fall to 10.6% in 2024 and 9.9% in 2025, roughly where it was at the beginning of the multi-year economic crisis .
Surpluses
At the fiscal level, the primary surplus target was exceeded, reaching 1.9% of GDP for 2023 once morest a target for a primary surplus of 1.1% of GDP. Now the achievement of primary surpluses will not be a necessary but not a sufficient condition for new reliefs, since the effort is transferred to the field of expenses. On the basis that the main indicator of Greece’s fiscal monitoring will be the net primary expenditure, Greece will have to negotiate and agree with the Commission the annual ceilings until 2027, which will be non-revisable but will have medium-term validity. This means that if you have one year of spending restraint under the target you will be able to spend more the next year and vice versa. However, based on the program he sent to Brussels, the target set by the Commission for an increase in spending by 2.6% (around 950 million euros) is lowered for 2024 to 2.1% (730 million euros), creating a small fiscal cushion of around 220 million euros. The limit for 2025 is expected to be announced in June following the European Commission’s spring estimates.
In 2025
At 146.3% the public debt
As for primary surpluses in both 2024 and 2025, they are projected to widen further to 2.1% of GDP for both years. The fiscal deficit from 1.6% of GDP in 2023 is expected to decline to 1.2% of GDP this year and 0.9% of GDP at the end of 2025, so it will be compatible with the limits set by the new fiscal rules .
These goals are achieved with a package of measures to increase incomes in the public-private sector and farmers.
Debt will continue to decline as a percentage of GDP reaching 146.3% in 2025 from 161.9% that closed in 2023. The overall debt reduction of 15.5% of GDP is set at an average annual debt reduction by 7.8% of GDP.
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