The Greek economy is projected to grow by 2.9% next year from 2.4% in 2023 according to the final budget plan for 2024 tabled in Parliament by National Economy and Finance Minister Kostis Hatzidakis. The budget plan will be discussed in the Parliamentary Economic Affairs Committee before a parliamentary plenary debate begins on December 13th, while a vote is scheduled for December 17.
The budget plan envisages that the inflation rate will fall to 2.6% on average in 2024 from 3.9%, the unemployment rate will drop to 10.6% from 11.2%, private consumption will rise by 1.3% (2.9% this year) and public consumption will fall by 1.6% (0.4% this year). Private investments will rise by 15.1% in 2024 from 7.1% in 2023, exports of goods and services are projected to rise by 5.6% (2.7% this year) and imports of goods and services are expected to rise by 4.6% (2.2% in 2023).
The strong resilience of the Greek economy, as reflected in 2022 and 2023, is projected to be confirmed in 2024, with the economy growing at a faster rate compared with the European average growth rate. This strong dynamism will lead to positive performance despite the economic uncertainty prevailing on a European and global level. A foundation for the positive outlook of the Greek economy will be adherence to prudent fiscal policy, which will lead to a further upgrade of the country’s credit rating. The economic performance of structural reforms, currently under way, will contribute to the strengthening of fiscal stability and a further reduction of public debt.
Real GDP is projected to reach 233.8 billion euros in 2024 (or more than 200 billion euros in fixed prices) to the highest level since 2010. The Greek economy is expected to surpass the EU average growth rate by 1.7 percentage points, with the domestic labour market expanding to the highest level in 14 years.
The Greek budget envisages measures to support lower incomes and to boost economic activities by focusing on combating tax evasion and reducing imbalances. These measures include an increase in public servants’ wages, new raises in pensions, raising the tax-free allowance by 1,000 euros for families with children, raising the minimum guaranteed income by 8%, expanding maternity benefits, continuing the youth pass and other benefits.
Short-term risks for the Greek economy in 2023 and 2024 included any further slowdown of the European and global economy, adverse international geopolitical developments, persisting high inflation, a renewed energy crisis, extreme climate phenomena, continuation of a strict monetary policy by ECB and slow absorption of Recovery and Resilience Funds.
The Greek government is introducing multi-level interventions to combat tax evasion in the country. These include: completion of the linking of cash machines with POS, limiting the use of cash on real estate transactions and raising fines for purchases worth more than 500 euros in cash. Introducing a mandatory e-transaction of account files to myData, digitalisation of tax inspections, offering a financial bonus to citizens helping in tax inspections, more severe fines for smuggling and reforming the taxation of individual companies.