‘Twin crisis’ limiting fiscal space for additional support, FinMin says

‘Twin crisis’ limiting fiscal space for additional support, FinMin says

The state budget, to be submitted to Parliament on Friday, does not include additional support measures for any sector of the economy, Finance Minister Christos Staikouras said on Wednesday.

In comments to Skai TV, Staikouras said that the restaurant and related businesses sector has has already received 2.3 billion euros since the start of the pandemic and will continue to be supported in 2022. 

The finance minister explained that the government’s priorities were determined by the intensity and the extent of the energy and health crisis, and were focused on limiting the negative impact on households. 

Calling this combination a “twin crisis,” he said it was limiting the fiscal space available for additional measures, though he stressed that a discussion with the prime minister will take place in early December to examine if more fiscal leeway can be created. 

Staikouras said that the Finance Ministry will offer a positive recommendation for a plan to raise the minimum wage for the second time in 2022 and reiterated that the state budget envisaged a GDP growth rate of around 7% this year. 

The finance minister said he expected the inflation rate to rise by 0.5% this year and by 1.0% in 2022, noting that he would “not be surprised if the inflation rate rose even higher in November and December, up to 4%.” 

He sounded optimistic, however, that the inflation rate would begin falling in the first quarter of 2022 for products and services and in the second quarter of 2022 for energy costs. [AMNA]

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