Staikouras: Energy crisis will hurt economic growth this year

Staikouras: Energy crisis will hurt economic growth this year

Higher energy prices will have a negative impact on Greece’s economic growth this year, the finance minister said on Wednesday, adding that he plans to submit a supplementary budget for 2022 to include extra spending.

He did not provide details or a new projection but said there will still be significant growth this year. Greece’s 2022 budget projects economic growth of 4.5%.

“There will be a negative impact in growth compared with the 4.5% (projection) and also a significant rise in inflation,” Christos Staikouras told an economic forum in Athens.

He said projections would be made public in the coming weeks when the ministry will send its new estimates to Brussels.

The supplementary budget will include €2 billion of extra spending to help households facing higher energy costs, if needed, the minister said.

This year’s budget projects a deficit of 1.2% of gross domestic product (GDP) and inflation of 0.8%. Greece’s annual consumer inflation surged to 7.2% in February, a 25-year high.

The platform to file the annual tax returns will open on Taxis by Thursday at the latest,  Staikouras also said.

He believed that that the property taxes this year will be €1 billion lower for taxpayers overall compared to what they paid in 2018.

The minister did not rule out lowering the VAT on certain foods, but said that this would depend on several parameters: fiscal space, developments in the Greek economy and the actual benefit to the public.

The government’s priority is to introduce more VAT reductions in the food sector, transportation and tourism by the ned of the year, at a total cost of €250 million. It also wants to abolish the solidarity tax for everyone in 2023 as well as reduce rates in insurance contributions. [Reuters, AMNA]

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