For the first time, the Council of the European Union and the European Commission have received the annual progress report for 2025 concerning the objectives established in Greece’s Medium-Term Fiscal-Structural Plan (MSP) for the period of 2025-2028, in accordance with the revised European economic governance framework that took effect on April 30, 2024.
The report projects a growth rate of 2.3% for 2025, alongside an investment growth rate of 8.4%, a private consumption increase of 1.7%, and export and import growth rates of 4.0% and 3.8%, respectively. The harmonized consumer price index is anticipated to slow to 2.4% in 2025, down from 3.0% in 2024.
The primary budget balance, considering the announced fiscal measures and performance in 2024, is expected to be 3.2% in 2025, reduced from 4.8% in 2024. The overall general government balance is projected at 0.1% for 2025, down from 1.3% in 2024. The debt-to-GDP ratio is forecasted to decrease from 163.9% in 2023 to 153.6% in 2024, and further to 145.7% in 2025.
Net primary expenditure growth for 2025 is projected at 4.5%, surpassing the target of 3.7%. This variance remains within the acceptable fiscal margin of 0.3% of GDP for annual growth established by the European framework, considering that cumulative expenditure growth for 2024 and 2025 is compliant with the relevant limits. In 2024, measures aimed at combating tax evasion—seen as effective revenue strategies—are expected to result in a net primary expenditure decline of 0.3%, against a growth threshold of 2.6%.
The annual progress report outlines fiscal interventions for 2024 and 2025 designed to enhance disposable income and foster sustainable growth and social cohesion, without compromising the responsible fiscal approach adopted by the country in recent years.
Key fiscal measures enacted in 2024 include reforms to the public sector wage bill, tax reductions for families with children, a 50% cut in business taxes, increased birth allowances, extended maternity benefits, and other initiatives addressing natural disaster impacts.
For 2025, the budget incorporates ongoing fiscal measures such as a further reduction in insurance contributions by one percentage point, wage increases in the public sector following a rise in the minimum wage from EUR 830 to EUR 880, the elimination of the business tax, incentives for innovation, provisions for mergers and acquisitions, adjustments for NHS staff on-call, exemptions from health insurance premium taxes for children’s health contracts, the launch of the My Home II program, and initiatives targeting demographic and housing issues.
Additionally, measures totaling EUR 1.3 billion, announced after the submission of the 2025 state budget, are being implemented due to positive fiscal performance in 2024 linked to reduced tax evasion. These measures comprise:
- A permanent increase of 500 million euros in the National Public Investment Program,
- Regular reimbursement of one month’s rent to low and middle-income families, estimated to cost EUR 230 million annually,
- Annual financial assistance of EUR 250 to 1.44 million pensioners, uninsured elderly, and disabled individuals, at a total estimated cost of EUR 360 million,
- Extension of exemption from pharmaceutical costs for low-income pensioners, with an annual cost of EUR 23 million,
- Provision of a risk allowance to security forces at an annual cost of EUR 222 million.
The report highlights Greece’s ongoing efforts to combat tax evasion through significant reforms, including:
- Integration of POS systems with cash registers,
- Full implementation of the “myDATA” platform for electronic business income and expense declarations,
- Mandatory acceptance of electronic payments in retail,
- Real estate transactions using electronic payment methods,
- A new framework for minimum taxable income for the self-employed,
- Increased penalties for cash transactions exceeding EUR 500,
- Utilization of prepaid cards for social security benefits,
- Digitalization and automation of tax authority inspections,
- Implementation of a digital work card recording actual employee hours.
The estimated positive impact on public revenues from the primary tax evasion measures is projected to exceed €2 billion annually.
Lastly, the report discusses the progress of all reforms and investments detailed in the Medium-Term Fiscal-Structural Plan (MTP) for 2025-2028.
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