Greece Budget 2018 projects higher economic growth and more taxes

Greece Budget 2018The Greek government has submitted to the Parliament the draft budget for 2018, which projected accelerated growth and higher surplus. The obligations to the Treasury for property owners will be increased and some tax relief will be dropped – in terms of VAT for Aegean islands, as well as excise duties on fuels. Next year, the country will return more confidently to the capital markets with new government bond issues.

In 2018 Greece must achieve a primary budget surplus of 3.82%, according to the government’s forecast. The growth of the economy will be within 2.5%. However, the country’s creditors wanted to see a surplus of 3.5% of gross domestic product (GDP) in the budget.

In 2017, Athens will record a surplus of 2.44% of GDP, including 1.4 billion EUR, which the government will distribute in the form of “social dividends”. The draft budget also gives a little more details about this measure, which now has the approval of the creditors. The government will give an average of 483 EUR per household, which will affect 3.4 million people.

The forecast is that the Greek economy will see a 1.6% growth this year, backed by domestic consumption.

In Greece, employment is growing faster than expected, which is a factor in increasing consumption, and the prognosis is that this trend will continue in 2018. In 2017, consumption growth is 0.9%, while in the next year it will accelerate to 1.2%. The government also plans to increase investment by 11.4%, down from 5.7% this year.

Against the backdrop of these positive projections for the country’s economic growth in Budget 2018, the country’s new public debt rose from 178.2% of GDP (slightly over 318 billion EUR) to 179.8% of GDP (332 billion EUR).

The draft budget for next year will be examined by committees in the Greek Parliament in the coming weeks. The first reading in plenary is expected to be on December 18, the budget will be finally adopted at midnight on December 22.