Stability Program foresees 2.3% growth in 2023 and 3% GDP growth in 2024

Greece will see a 2.3% growth for 2023, while its GDP will grow 3% in 2024, 3% for 2025, and 2.1% for 2026, according to an assessment by the Finance Ministry.

The data was included in the 2023-2026 Stability Program submitted to the European Commission on Saturday. According to the data submitted:

– Inflation is expected to reach 4.5% in 2023 and drop to 2.4% in 2024 and to 2% in 2025 and 2026.
– Unemployment is expected to set at 11.8% in 2023 and to drop to 10.9% in 2024, to 10% in 2025 and to 9.8% in 2026.
– Investments are expected to rise by 13.2% in 2023, by 9.7% in 2024, by 10.7% in 2025, and by 7.2% in 2026. Key to increases of investments will be the Recovery and Resilience Fund and public investments reaching 17% of GDP in 2023, 1.9% of GDP in 2024, 1.8% of GDP in 2025 and 1.7% of GDP in 2026.

The Stability Program includes all measures legislated from the start of 2023 to the present, such as the permanent reduction of insurance contributions by 3 points, the permanent abolition of the solidarity fee in the public and private sectors, the expansion of reduced VAT in the restaurant sector, transportation, and a series of goods and services, the increase of disability bonuses and disability pensions, and other measures, including those to manage the energy crisis, among them a greater subsidy to hospitals form 1.68 billion euros in 2023 to 1.75 billion euros in 2024.

The Stability Program also includes the cost of pension increases per year based on GDP and inflation, and the increase of public sector employees’ wages as of January 1, 2024.

Based on all of the above, the FinMin report said, and as long as policies remain stable, the general government’s primary result should be a surplus of 1.1% of GDP in 2023, 2.1% of GDP in 2024, 2.3% of GDP in 2025, and 2.5% of GDP in 2026.

Since Greece is in an electoral campaing period, any additional measures that had been promised are not included. The target for 2023 remains a primary surplus of 0.7% of GDP, it said. The present government, the ministry noted, had announced additional fiscal measures totaling 0.1% of GDP for 2024 and 0.3% of GDP for the years 2025 and 2026, among others. Implementing these and other announced measures will not upset the medium-term target for a primary surplus of around 2%, it added.

The Stability Program’s key factor is a rapid deescalation of the general government’s debt, which, under consistent policies, is expected to drop from 171.3% of GDP in 2022 to 162.6% of GDP in 2023, 150.8% of GDP in 2024, 142.6% of GDP in 2025, and 135.2% of GDP in 2026.