The government is preparing a supplementary budget that will include further subsidies to households and businesses without changing its primary deficit target of 2% of GDP, Finance Minister Christos Staikouras said on Thursday.
According to sources inside the Treasury, the extra funding will be possible without revising the fiscal targets because Greece’s GDP will be €7 billion higher than initially estimated, that is, it will reach €204 billion instead of €197 billion at the end of the year. Treasury officials said the European Commission agreed with the new estimate.
The higher GDP will also mean higher revenues, an extra 2.2-2.3 billion euros, the same officials said. That will also determine the size of the supplementary budget.
Details about the supplementary budget will be announced by Prime Minister Kyriakos Mitsotakis at the Thessaloniki International Fair (TIF) on September 2022, during the customary address outlining the following year’s economic policy.
“We will see the trends in the economy at the beginning of September, how GDP stood in the second quarter, the priorities for the fourth quarter,” Staikouras told state TV ERT. “In any case, there will be announcements in September; it so happens that TIF takes place at that time,” he added.
Staikouras said he did not want to go into details at this point, but left it open as to whether the Fuel Pass subsidy that expires in September will be extended, the heating subsidy will be increased and whether, as rumored, households will receive checks to help combat inflation and the minimum wage raised for the third time within a year.
“Everything will be announced at their proper time,” he said.
Staikouras did say that tourism and citizens’ timely payment of the various income and indirect taxes have created the necessary margin to design the budget without revising the fiscal targets. But the deadline for the submission of income tax declarations has been pushed back twice, as less filings than expected had taken place.
Finance Ministry officials are closely monitoring the global price of natural gas, which at present by far exceeds the €200 per MWh that they planned for when designing the support measures.