At 365 billion euros or 154% of GDP, it is estimated that the public debt will be formed at the end of 2024, against 369.099 billion euros or 163.9% of GDP in 2023, showing a decrease of 9.9 percentage points compared to 2023. For in 2025, it is predicted that it will also be formed at 365 billion euros of GDP, presenting a decrease of 6.5 percentage points of GDP compared to 2024, which is related to the difference in the amount of GDP.

The early repayment of the European GLF loans, which have a floating interest rate, is expected to continue in December 2024 with the repayment of loans maturing in the years 2026, 2027 and 2028, totaling €7.935 billion. Loan repayments of €5.29 billion in December 2023 and €2.645 billion in December 2022 have preceded.

Following the upgrade of the Treasury bond to investment grade (BBB-) during the second half of 2023 by the rating agencies DBRS Morningstar, Standard & Poor’s, Fitch Ratings, R & I and Scope, as well as the upgrade by Moody’s to the Ba1 level, followed during this year by the upgrading of the outlook of the Greek economy by the rating agencies Standard & Poor’s, Scope, DBRS Morningstar and Moody’s. This fact makes possible a new upgrade of the debt in the coming months.

On 9/30/2024, the total amount of loans granted by the Support Mechanism amounted to 226,790.1 million euros, which, after the full repayment of the IMF, consists exclusively of European loans of the member states of the eurozone.

Privatizations

The cash revenues from privatizations expected to be realized through the TAIPED, are estimated at 1.881 billion euros and are distinguished as follows:

  • an amount of 1.378 billion euros, which is included in the categories “Sales of goods and services” and “Other current income” (non-financial transactions), concerns concession contracts, with the main one being the Egnatia Road concession contract with projected revenues of 1.35 billion euros,
  • an amount of 37 million euros included in the category “Sales of fixed assets” (non-financial transactions), refers to sales of fixed assets, and
  • an amount of 467 million euros included in category 45 “Equity securities and shares of investment funds” (financial transactions), concerns the sale of shares of various companies with the State and/or TAIPED as a shareholder.

At the same time, 2025 is expected to be the year of the full evolution of the EESYP (Super Fund) into a Sovereign Wealth Fund, with the completion of the absorption of TAIPED and the assets of the HFSF as well as with the activation of the new Investment Fund, whose investments are expected to be a catalyst for attracting further capital.

In addition, it provides:

  • the start of new important projects, such as the regeneration of the TIF and the improvement of services to citizens, such as “Tap ‘n’ Pay” and
  • the increase of investments, both directly by EESYP and through its new investment arm, which will contribute to the development of the Greek economy and the improvement of the services provided, promoting a new model where the companies in its portfolio will be an example of best practices for the public sector.

Main sources of risk for fiscal forecasts

According to the Ministry of Finance, the financial projections of the 2025 budget are subject to risks and uncertainties. Under the current circumstances, the most important risks are related to the current geopolitical developments, specifically the evolution of the war in Ukraine and the conflicts in the Middle East. These developments may have significant effects on international economic activity, particularly through energy prices.

In addition to the evolution of the war, additional factors of risk and uncertainty are identified in relation to the speed of the return of inflation to the medium-term objective of the ECB, as well as the effects of these developments on the course of monetary policy. At the same time, a source of uncertainty is the budgetary adjustment observed in major EU economies as well as the possible escalation of trade tensions at the international level.

The sensitivity analysis aims to assess the course of the main fiscal variables under different assumptions about the growth rate of the Greek economy in 2025. Specifically, in the context of the analysis, the effect on the estimated fiscal result for 2025 of a reduction in the rate of nominal of GDP growth by 0.5% compared to the basic macroeconomic scenario of the budget. This impact has been assessed through the elasticities used in the context of European fiscal supervision and which are described in the European Commission’s publication “Report on Public Finances in EMU 2018”.

A reduction in the nominal growth rate of 0.5% relative to the baseline macroeconomic scenario implies that 2025 GDP (in current prices) will be €246.3 billion from €237 billion in 2024 against a nominal GDP of €247 .5 billion euros in 2025, according to the base scenario. According to the results of the sensitivity analysis, such a change in the level of nominal GDP would lead to a deterioration of the fiscal outcome by 0.25% of GDP compared to the 2025 budget scenario.

Specifically, in this case the General Government balance according to ESA would be -0.8% of GDP compared to -0.6% of GDP, while the primary fiscal result according to ESA would be +2.2% of GDP compared to + 2.4% of GDP. In absolute terms, the nominal growth rate reduced by 0.5% would lead to an additional fiscal burden of 0.61 billion euros.