Greece’s 2025 state budget (final version) is set to be submitted to Parliament on Wednesday, Nov. 20. According to sources, the final budget document projects a reduction in inflation from 2.7% in 2024 to 2.4% in 2025, alongside an increase in the growth rate from 2.2% in 2024 to 2.3% in 2025.
Key Budget Projections
Public debt as a percentage of GDP will remain slightly elevated due to the incorporation of deferred interest of 12.4 billion euros from the second bailout loan as per Eurostat. It also accounts for the early repayment of 7.93 billion euros in bilateral loans this year.
Specifically, public debt is expected to be 154% of GDP in 2024, falling to 147.5% in 2025. As of October 18, 2023, Eurostat confirmed public debt at 163.9% of GDP for 2023, influencing the downward projections for 2024 and 2025.
Furthermore, investments are projected to grow by 6.7% in 2024 and 8.4% in 2025, while the unemployment rate is forecasted to drop from 10.3% in 2024 to 9.7% in 2025.
On the other hand, nominal GDP in 2025 is expected to increase by approximately 10 billion euros, with the debt-to-GDP ratio decreasing by 4.6 percentage points.
What is more, the cost of key policy measures for 2025 is estimated to reach 1.1 billion euros and will include the following:
Reduction by 1% in social security contributions, starting Jan. 1, 2025 (0.5% reduction for employees and 0.5% for employers in the health sector).
The elimination of the “business levy” for freelancers and all individuals using service contracts.
A permanent reimbursement of the special consumption tax on agricultural diesel, based on actual consumption.
A 2.45% increase in pensions from Jan. 1, 2025, aligned with a 2.2% growth rate and 2.7% inflation in 2024.
A 20% increase in on-call compensation for public healthcare doctors, with a flat tax rate of 22% applied to these payments.
An increase in public sector wages starting April 2025 to ensure that entry-level public sector salaries are at least equal to the minimum wage in the private sector.
An increase in compensation for night shifts for all uniformed personnel from Jan. 1, 2025.
However, the macroeconomic forecasts for 2024 and 2025 are subject to risks, including the potential escalation of geopolitical crises in Ukraine and the Middle East, as well as possible new sources of tension. These could affect international trade and the trajectory of inflation reduction.
