In the next few days, the financial staff of the government enters the final stretch to finalise the size of the 2025 budget as the meetings begin to take the decisions that will reflect the main priorities of the economic policy for the coming year.
These are decisions in key areas of the economy that will be dictated by the government’s key political and economic priorities, among which the support of the economically vulnerable, alongside the need to maintain fiscal discipline provided for by the new EU fiscal rules, the continuation of the policy reducing taxes and dealing with everyday problems.
Thus, the new budget will be an exercise in balancing between the obligations to comply with the new fiscal rules that set a 3 percent limit on the growth of primary expenditure in 2025 and the need to continue the policy of supporting low incomes, as the government has already announced, alongside the further reduction of tax burdens. In the equation should be added the coverage of basic categories of expenses which include the expenses for the equipment, for the new recruitments that have been announced and for the awarding of new pensions, as well as those related to dealing with the phenomena of climate change.
The government’s “ally” is, of course, the positive developments in the execution of this year’s budget due to the increase in revenues and the primary surplus beyond the goals that have been set, which are expected to facilitate decision-making.
The main announcements on the economic policy of 2025 are expected to be made by Prime Minister Kyriakos Mitsotakis at Thessaloniki International Fair (TIF) in early September. In any case, however, the government has announced that they will not be characterised by the logic of benefits, they will be balanced based on the potential of the economy and the needs of society.
The Finance Ministry has already announced that at the end of the year, an additional allowance will be given to pensioners who do not receive annual increases due to personal differences. In this context, given the positive course of this year’s budget, it is expected to examine the possibility of supporting other vulnerable groups of low-wage and low-pensioners. There are also proposals to widen the reduction in social security contributions that have been announced and foresee a reduction of 0.5 percent in 2025 and 0.5 percent in 2027.
The fiscal targets of the new budget will be harmonized with the forecasts of the Stability and Development Program 2024-2025. It is predicted that the primary surplus for 2025 and the following years will be 2.1 percent of GDP. This is a condition for the further reduction of public debt, which is expected to fall this year to 143 percent of GDP.
SOURCE; ANA-MPA
