By Chrysostomos Tsoufis

Despite the two supplementary budgets, despite the election year and despite the heavy burden brought on public finances by the costs of compensation for those affected by natural disasters, the year will close with a primary surplus close to 1.1% and not 0.7%, as was the official target, especially after the Daniel incident. This will be provided in draft budget for 2024 to be submitted by the government in the Parliament – first Monday of October, as it has a constitutional obligation.

However, this fiscal space that is being created (close to 1 billion euros) we will “keep” and will not use it for benefits, an official of the Ministry of Finance commented to, because “we want to positively surprise the markets” in view of and of the two upcoming assessments of the Greek economy, on October 20 by S&P and on December 1 by Fitch.

This means that they put an end to any scenarios of subsidies at the pump for heating oil, even more so when the services of the Ministry of Finance estimate a de-escalation of its price close to last year or even lower than last year’s double subsidized price.

It will be provided in the draft pension increase for 2.6 million pensioners at up to 3.1% (as some have a personal difference which they will zero out and will get less money in their pocket) 700,000 of them will receive a personal difference allowance of €100-200 just before Christmas.

As for the remaining 0.5% that the government “owes” from last year, everything will depend on whether the fiscal situation turns out to be even better than forecasts for a 1.1% surplus and growth. In any case it will not be mentioned in the draft.

In the Ministry of Finance, they are concerned about what they will do with the reduced VAT on tourism, culture and sports, the validity of which ends in 2023. The cost of a new 6-month extension amounts to €250m (with coffee and transport carrying the biggest burden) but in the Ministry of Finance they are also considering the possibility of extending the reduced tax on only some products and services. And on this front, we will have the “final” picture in the final text of the budget and not today.

According to the draft budget growth is estimated at 2.3% this year and 3% in 2024, the primary surplus at 1.1% this year and 2.1% in 2024 and inflation at 3.9% and 2.4% next year.

In total, for the second half of 2023 and 2024, support measures for households and businesses of approximately €2.5 billion are foreseen.

Apart from increases in pensions and personal difference allowance, they are provided for increases in the State for 66,000 civil servantsan increase in the tax-free allowance by €1,000 for families, exemption of former EKAS beneficiaries from pharmaceutical expenses and an increase in the amount of the minimum wage and an extension from 4 to 9 months for the maternity allowance for freelancers and farmers.