Extra billion offers spending leeway
The Finance Ministry and the Bank of Greece estimate that the 2022 deficit will eventually be 1-1.2 billion euros less than the budget predicted, which creates fiscal space for 2023.
According to sources, State General Accounting Office officials even predict a primary deficit of 1-1.2% of Greece’s gross domestic product for 2022, while among technocrats there are also estimates that it may fall even to 0.5% of GDP.
In the runup to the election, the temptation for benefits is great – after all, it has already been announced that pensioners who didn’t get a raise will get a handout. However, given that a part of the extra leeway will be allocated to support measures, any mindless benefits must be avoided, carefully choosing the priority areas, such as the reduction of insurance contributions or the strengthening of health, say financial analysts.
According to a ministry official, at least one part will be preserved and to the extent that it is permanent, it will be directed to the policy measures planned for the next four years.
Analysts suggest that it be allocated to reduce social security contributions. Others advise adding it to the budget surplus, to achieve the faster upgrading of Greece’s credit rating to investment grade.
