Greek economy: Fitch and the Commission’s report will judge support measures

The government is dealing with the headache of persistent high prices. Rising food prices are a cause for concern despite falling headline inflation.

And at the same time, fiscal openings against the crisis are being closed by order of Europe, as from 2024 the rules on surpluses, which have been relaxed since the pandemic, are being reinstated.

The Greek government is on the last mile of targeted support measures, however if the accuracy continues aid may be needed in 2024 as well.

The two crucial dates

The two crucial appointments which will outline if there are any margins are the forthcoming report of the European Commission, in which the forecasts for Greece will be recorded. The plans of Athens concern targeted measures until the end of the year, however the great demand is the need for continuity of aid in the midst of war and accuracy.

The Commission’s forecasts

First of all, the Commission’s updated forecasts next week are awaited with great interest. The Commission will publish its report on the EU countries, and whether it will change its estimates in relation to the spring ones. Its forecasts show that the Greek economy will register a rate of 2.4% and the Eurozone 1.1%. The government estimates growth of 2.3% in 2023.

The Fitch ratings agency

On December 1, rating agency Fitch is expected to publish its investment grade verdict. If the estimates are confirmed, then two of the three international houses will have returned Greece to the investment grade.

GDP data

Also, a few days later on December 6, the Hellenic Statistical Authority will announce the figures for the course of the GDP in the third quarter and this will send a signal for the growth this year, and therefore the fiscal margins.

The budget

However, the financial staff, upon submitting the final budget to Parliament and voting it before Christmas, is preparing for changes in energy prices with the Middle East as a background. The final figures of the state budget will be seen in the Parliament where the final plan with the changes is expected to be submitted.

The key is the course of revenues for October, where the room for fiscal maneuvers will also be seen.

How will the government distribute the extra revenue?

As concerns inflation, it is uncertain whether the state budget target for 2024 will be reached. The government estimates it will fall to 2.4% in 2024 from 4% this year.

This estimate, however, was made before the war in Israel with the assumption that the price of a barrel of crude oil will remain at 80 dollars, of natural gas at 40 euros per MWh and the exchange rate of the euro at 1. 1 to 1 with the dollar.

An important factor is the evolution of the war in Israel, with benefits now strictly targeted at the vulnerable.

The government has signaled that the extra money from the anti-avoidance measures will be given to society, with a milestone year of 2024.

The financial staff calculates that the new self-employed tax system brings in 874 million euros in revenue, while the final amount after the abolition of the pretense fee will be in the order of 606 million euros per year.

This amount, according to the government and executives, will be allocated to society, either through subsidies to those in need and to Education and Health.

So their final direction is expected to be recorded in the state budget and final plan for 2024, which will be voted on near Christmas.