By Chrysostomos Tsoufis

The country may be entering – officially from Saturday – a pre-election period, but for the economy it is… Monday. Its good course continues unhindered, at unexpected rates, forcing officials of the Ministry of Finance to already talk about a new review on the improvement of the growth rate, just a month after Christos Staikouras announced that the GDP this year it will eventually grow by 2.3% against 1.8% of the budget projections.

A first indication that things are going better than expected is the revenue trend. In the first 3 months of the implementation of the budget, the tax revenues are already €1.5 billion above the targets (in fact €1 billion if the revenues from traffic taxes that count in 2022 are subtracted). In the Ministry of Finance they are rubbing their hands and eyes with the collections from VATwhich in the first 2 months of the year exceeded the target by €330 million.

Of course, the de-escalation of energy prices also plays a key role. The 40€/Mwh in which the price of natural gas is at the moment, is 3 times lower than the assumptions of the budget. At the same time, the country has also limited natural gas imports because renewable energy sources are increasing and all this relief directly affects the GDP. The first conservative calculations that have been made speak of an additional €3 billion in GDP. The price of oil, which moved on average to $95/barrel last year, also acts as a reinforcement. But this year it is $10 lower, at $85.

Plus in none of his scripts Ministry of Finance no resources are required from him Budget in order to subsidize electricity bills. The resources of the green fund are sufficient.

Investments will also give a significant boost to the national gross product. An official of the Ministry of Finance said that there is a large stock of investments in the reconstruction fund, while a significant number also comes from the past. Private investments take about 2 years to produce results and public investments take about 3 years. Since 2019, investments have increased by €9 billion to €28.5 billion, and according to Theodoros Skylakakis, they will be the main factor in GDP growth in the coming years, replacing consumption.

Nevertheless, the government is not expected to officially change the growth rate estimate in the Medium-Term Program it will send to Brussels at the end of the month. The review will come later as it will be leveraged as a “tool” as yet another surprise in the markets that will ensure investment grade acquisition.

All this – according to government officials – provided the polls don’t… give birth to unpleasant surprises.