First balanced budget plan in four decades

The government will on Monday table the first balanced budget since the country’s return to democracy in 1974, providing for a positive growth rate and a decline in unemployment.

All sources point to a primary surplus target of 2.9 percent of gross domestic product for 2015, with the overall balance of the general government being marginally negative (at 0.2 percent of GDP), although in general terms this will be the first time that the primary surplus will suffice to cover the country’s needs for servicing its external debt.

Notably, the Finance Ministry’s original plan had been for a primary surplus of 2.34 percent next year, but after the reaction from the country’s creditors it has raised the barrier again close to the bailout program’s target of 3 percent.

The first draft budget will provide for a decline in unemployment to 22.5 percent, from 26.6 percent this summer, a GDP growth rate of 2.9 percent and an extra 1 billion euros in state revenues thanks to that growth, which is based on a presumed 11.7 percent increase in investments. Primary expenditure will reportedly be 600 million euros less than in 2014.