The increase that will have to be granted to hundreds of thousands of pensioners will potentially rise to over 6%, while pressure for salary hikes in both the public and private sectors will intensify.
The most recent forecasts are those from the European Commission, which raised the estimated growth rate for Greece to 4% and the average annual inflation rate above 8%. The Commission’s revised forecasts are essentially identical – at least in terms of trend – to the government’s, which is optimistic about a higher growth rate this year. It cannot, however, exclude the possibility that average inflation for the year will close much higher than 5.5-6%, which was the forecast until now.
Real income losses will grow until the raises are introduced, while deposits will record their biggest month-to-month “loss” on record. The execution data of this year’s budget are changing, while next year’s budget will be designed under completely different conditions. The picture is completely different for the country’s public debt, whose ratio to GDP will improve faster than expected. That is the chain of effects caused by the revision of the forecasts for the growth and the inflation rates.