The Greek government is set to unveil its draft 2025 state budget on Monday, October 7th.
The budget aims for a primary surplus of 2.5% of GDP, surpassing the previous target and adhering to new EU fiscal rules.
However, the escalating conflict in the Middle East casts a shadow over the economic outlook. With oil prices potentially surging, Greek authorities have factored in a conservative estimate of $80 per barrel.
The government has capped spending increases at 3.7 billion euros, allocating most of this amount to previously announced measures.
This leaves little room for additional benefits, even if the economic situation deteriorates.
A key challenge lies in managing the budget in the face of potential revenue shortfalls. While the current budget has benefited from higher-than-expected tax revenue, this may not continue into 2025.
The new fiscal rules impose strict limits on spending overruns, and failure to comply could lead to severe consequences. Greece must carefully balance its budget to avoid entering the excessive deficit procedure.