Blueprint for fiscal stability until 2028
The Medium-Term Fiscal Structural Plan for 2025-2028 foresees a sharp rise in GDP, significant primary surpluses, and a drop in unemployment to pre-crisis levels, according to the presentation by National Economy and Finance Minister Kostis Hatzidakis and his deputy, Thanos Petralias, on Monday.
At a press conference following the plan’s presentation at a cabinet meeting, the ministers presented the basic points, with Hatzidakis adding that under the plan the government will achieve “fiscal stability with a reduction of debt, development and an increase in salaries.”
The recent improved fiscal performance has allowed Greece to get European approval for extra spending of 4 billion euros by 2028.
The plan is being tabled in Parliament for its first reading in committee on Friday, in the presence of the Bank of Greece and the Hellenic Fiscal Council. The final plan will be sent to the European Commission for approval by the Ecofin meeting on November 28.
Some of the plan’s key points include the following:
• The public debt will shrink for the current 153% of GDP to 133.4% of GDP in 2028.
• The fiscal deficit (based on the cap of 3% of GDP) will shrink from 1% of GDP this year to 0.6% of GDP in 2025, 0.8% of GDP in 2026, 1.1% of GDP in 2027, and 1.2% of GDP in 2028.
• Budget primary surplus: From 2.4% of GDP this year (against the initial forecast of 2.1% of GDP), it will reach 2.5% of GDP in 2025, and 2.4% of GDP in each of the coming years.
• Nominal GDP: From €232 billion, it will reach €242 billion in 2025, €253 billion in 2026, €263 billion in 2027, and €272 billion in 2028. Hatzidakis said these are conservative assessments, as the European Commission does not include inflows from the Recovery Fund and NSRF.
• The minimum wage will increase from €650 in 2019 to €950 in 2027, and the average wage from €1,046 in 2019 to €1,500 in 2027.
• Unemployment will drop from 10.5% this year to 9.7% in 2025, 9.2% in 2026, 8,7% in 2027, and 8.5% in 2028.
Hatzidakis said the plan includes eight basic infrastructural interventions for demographics, the housing problem, facing repercussions of the climate crisis, boosting the health system, upgrading the education system, boosting entrepreneurship, and the review of expenditures for more effective distribution.
