As the Greek government enters the final phase of preparing the 2025 budget, a delicate balancing act is underway.
The economic team is navigating between the need to support vulnerable populations and adhere to the new EU fiscal rules limiting primary expenditure growth to 3 percent in 2025.
The budget will need to allocate funds for essential sectors like defense, new hires, pensions, and climate change initiatives, all while maintaining a commitment to reducing taxes and addressing everyday challenges.
This year's better-than-expected budget performance, with higher-than-anticipated revenue and primary surplus, provides some breathing room for decision-making.
Still, the government has emphasized a balanced approach, avoiding excessive spending and aligning with the economy's capacity and societal needs.
Prime Minister Kyriakos Mitsotakis will announce the key economic policies for 2025 at the Thessaloniki International Fair in early September.
While some measures, such as additional allowances for pensioners without annual increases and potential support for low-income earners and pensioners, have been announced, the government remains cautious about excessive benefits.
The new budget's fiscal targets will align with the Stability and Growth Program for 2024-2025, forecasting a primary surplus of 2.1 percent of GDP in 2025 and beyond, crucial for further reducing public debt.
This commitment to fiscal discipline reflects the ongoing effort to balance the need for economic growth and social welfare while meeting the demands of the new EU fiscal rules.