Greece: Draft Budget foresees 2.3% growth in 2023

The draft budget has been submitted to the Parliament.

Based on the text, a growth rate of 5.3% is forecast for 2022, compared to 4.5% predicted in the 2022 State Budget and 3.1% estimated in the April 2022 Stability Program, at a time when the Harmonized Consumer Price Index is estimated to increase by 8.8%, against 5.6% as was foreseen in the Stability Program.

In this context, the unemployment rate is expected to be 12.9% against 13.9% foreseen in the Stability Program and 14.2% in the 2022 Budget.

This result was supported within 2022 by fiscal measures amounting to €4.7 billion to address the energy crisis, measures amounting to €4.3 billion to deal with the health crisis, but also reforms for the benefit of citizens, such as the double increase of the minimum wage by 9.7% in total in 2022, the further permanent reduction of the Unified Property Ownership Tax (ENFIA), from 2018 by 35 % and the abolition of the tax on parental legacies-gifts.

Estimates for 2023

For 2023, under the extremely uncertain forecasting conditions and based on current energy futures prices, the Harmonized Consumer Price Index is expected to increase by 3%, compared to 4% for the Eurozone, according to the European Commission’s summer forecasts, while growth is expected to be 2.1%, compared to 1.4% of the Eurozone average according to the European Commission’s summer forecast and 0.9% according to the ECB’s September 2022 forecast.

It is noted that the forecasts for growth and inflation, due to the conditions of extreme geopolitical uncertainty, also have a high degree of uncertainty and may be revised by the European Commission before the submission of the final draft of the budget.