The draft state budget for the year 2025 was submitted today for discussion at Parliament's Standing Committee on Economic Affairs.

In the relevant letter to the members of the Standing Committee on Economic Affairs of the Parliament, the Minister of National Economy and Finance Kostis Hatzidakis and Deputy Minister Thanos Petralias said:

"The 2025 draft budget is submitted at the same time as the submission to the Council of the European Union and the European Commission of the first Medium Term Fiscal-Structural Plan 2025-22028 (MTFS) based on the new European economic governance framework. Therefore, the macroeconomic and budgetary figures reflected in the draft are in line with the MEFP estimates.

Over the last three years, the global economy has faced successive crises due to interconnected economic, climatic, and geopolitical turbulence. Despite signs of improvement, the international economic environment is characterized by increased uncertainty due to recent geopolitical developments in the Middle East, the protracted war in Ukraine, and short-term factors like contractionary monetary policies and reduced fiscal support internationally following the pandemic and the energy crisis, as well as the significant and accelerating impacts of climate change.

In this adverse and uncertain international environment, the Greek economy is proving resilient. Growth is expected to reach 2.2% in 2024 and 2.3% in 2025 compared to 0.8% and 1.4%, respectively, estimated for the Eurozone, based on the European Commission's spring forecasts. Investment is expected to increase by 6.7% in 2024 and 8.4% in 2025, and the unemployment rate is expected to fall from 10.3% in 2024 to 9.7% in 2025. Gross domestic product (GDP) in nominal terms in 2025 is expected to increase by around EUR 10 billion, and the general government debt-to-GDP ratio is expected to fall by 4.6 percentage points. The consumer price index is estimated at 2.7% in 2024 and is expected to decelerate further to 2.1% in 2025.

The 2025 draft budget includes all the announced interventions, including those presented at the Thessaloniki International Fair. While a number of other interventions use funding from the Public Investment Programme (PIP) and the Recovery and Resilience Fund (RRF), the new permanent fiscal measures affecting the regular budget impose an additional fiscal cost in 2025 compared to 2024 of €1.1 billion. In this context, investment spending is expected to increase from €13.1 billion in 2024 to €14.3 billion in 2025, plus the resources of the loan component of the EIF.

In 2025, general government debt is projected to reach €361.4 billion, or 149.1%, as a share of GDP, a decrease of 4.6 percentage points of GDP compared to 2024.

The new fiscal interventions, complemented by a series of institutional measures, focus on supporting disposable income, boosting investment and innovation, addressing demographic and housing issues, and tackling the challenges of climate change.

The interventions are within the fiscal targets set in the MTO, as net primary expenditure is projected to increase by 3.6% in 2025 compared to 2024, while the related target is an increase in expenditure of up to 3.7%. Against this background, the general government primary balance is expected to be 2.4% in 2024 and 2.5% in 2025, and the overall balance is projected to be -1.0% in 2024 and -0.6% in 2025.

The 2025 budget is required to reconcile the objective of fiscal stability with the need to increase the disposable income of citizens and to address modern challenges such as the demographic and housing problem and the climate crisis, as well as to cover the necessary expenditure to strengthen the National Defense.

The aim is to ensure the strong growth of the Greek economy, the further upgrading of the country's creditworthiness, and the well-being of its citizens, which requires the allocation of finite fiscal resources with maximum economic and social efficiency."