Investments key to budget
After a decline recorded so far this year, money brought into the Greek economy must grow
The combination of fiscal improvement, with an increase in the primary surplus to 2.1% of gross domestic product in 2024 from 1.1% of GDP this year, as well as 2 billion euros of interventions to improve incomes, mainly of civil servants, characterizes the 2024 budget which Minister of National Economy and Finance Kostis Hatzidakis submitted on Tuesday in Parliament, accompanied by Deputy Minister Athanasios Petralias.
“Key” to the achievement of these ambitious goals are investments which are expected to increase by 15.1% compared to 2023.
This year the field of public investments was rather disappointing, since they decreased from €11.3 billion last year to €10.8 billion, due to both the election period and the delay of the last tranche of the Recovery Fund. Revenue from the Recovery Fund is €2 billion, down from €2.8 billion the previous year.
The decline was offset by an increase in private investment, with Recovery Fund loans playing a key role, but again the overall rate of investment growth was around half of what was forecast in the 2023 budget, at 7.1%.
For 2024, the government aspires to recover lost ground in public investment, forecasting it to rise to a record high of €12.1 billion, or 12.43%, contributing significantly to overall investment growth of 15.1%. It is noted that of the €12.1 billion, €6.5 billion is in the form of European funds of the National Strategic Reference Framework (NSRF), €2 billion is the national part of the NSRF and €3.6 billion is the projected revenue from the Recovery Fund.
However, despite the slowdown in public investment in 2023, the budget was saved by tourism, which combined with inflation and rising wages and pensions led to a 9.1% increase in revenue this year.
The 2024 budget foresees a growth rate of 2.9% (0.1% below the first draft, but still higher than the forecasts of international organizations such as the EU – 2.3% – and the IMF – 2%), against 2.4% this year (up from 2.3% in the first draft).
