The 2024 budget tabled in Parliament on Monday shows that Greece’s economy is projected to grow at a faster pace next year, rising by 3.0 percent compared to a 2.3 percent expansion this year.
According to the draft budget, Greece is expected to achieve a primary budget surplus of 2.1 percent of gross domestic product (GDP) next year. This excludes debt servicing payments.
The country, which came out from three international bailouts in 2018 but whose finances are still closely monitored by the European Union, reiterated its projection for a primary budget surplus of 1.1 percent of GDP this year.
Budget surplus in Greece to be achieved despite additional spending
This target will be achieved despite additional spending of 1.3 billion euros (1.37 billion dollars) in disaster relief, caused by Storm Daniel, the country’s worst on record, and financial aid to vulnerable households from rising inflation and energy costs.
The country’s public debt, the highest in the eurozone, is seen dropping to 152.2 percent of GDP next year from 159.3 percent of GDP this year, according to the draft budget.
The Athens-Macedonia News Agency (AMNA) says that the budget reflects the Greek economy’s return to normalcy after four difficult years marked by the coronavirus pandemic, the Ukraine war, and high prices.
Prime Minister Kyriakos Mitsotakis and National Economy & Finance Minister Kostis Hatzidakis asserted that Greece is fully keeping its commitments, and its fiscal performance will be ranging within the framework of the Stability Program.
Greece’s economy awaits more credit upgrades
The government is keeping an eye on the next two ratings by credit agencies S&P Ratings (October 20nd) and Fitch Ratings (December 2nd) in the hopes that at least one of the two will provide Greece with the much-sought-after investment grade.
In September, the ratings firm Moody’s gave Greece’s economy a significant vote of confidence by raising the country’s credit rating by two notches.
Moody’s said it was upgrading Greece’s rating from Ba3 to Ba1, with a stable outlook. It stopped just short of returning the formerly struggling country to formal financial respectability.
Moody’s said the government’s parliamentary majority following June elections “provides a high degree of political and policy certainty for the coming four years, fostering the ongoing implementation of past reforms and the design of further structural reforms.”
It said it expects Greece’s GDP to grow an average 2.2 percent annually in 2023 to 2027, driven by investment and consumption, a “very significant improvement” compared to average growth of 0.8 percent in the five years prior to the pandemic.
In addition, it is expected that Greece’s debt will likely fall close to 150 percent of GDP as early as 2024 due to stronger GDP growth than projected earlier.
Earlier in September, rating agency DBRS Morningstar increased Greece’s credit rating to investment-grade status, or triple B.
In August, Scope Ratings, the leading European provider of credit ratings, raised Greece’s rating to investment grade.