In the decision to achieve at any cost the goal deficit 1.7% of GDP or even better this year to build market confidence and defer potential new election-related benefits to 2023, financial staffsubject to the presentation of the final plan budgetaccording to his sources.

Lower gas prices will provide at least one extra profit in November fiscal space, as the government will not have to go deep into the state treasury to subsidize electricity tariffs. Fiscal space is expected to be further strengthened by higher-than-budget GDP growth (5.3%). Perhaps, according to analysts and his estimates Ministry of Financeto go to 6% or even higher.

However, at least for the moment, the economic headquarters is very conservative in planning new support measures for this year, limiting itself to boosting diesel fuel, the price of which has risen significantly.

The cost of this measure, however, does not exceed 30 million euros per month, based on its previous implementation, so it will not exhaust the available space, which could reach and exceed 500 million euros if development proves to be truly dynamic.

If the economic staff ends up sticking to this line, the primary deficit could be well below 1.7% of GDP, all the way down to 1.3% of GDP. This will serve as a positive signal for the markets due to the recovery of the investment grade, as well as rising borrowing costs.

On the contrary, growth is expected to slow down in 2023 and there may be additional needs for measures that the government will certainly want to meet in connection with the elections. After all, the budget provides for a reserve of only 1 billion euros to support electricity tariffs, which may not be enough.

As the government demonstrated financial stability in 2022, economic staff estimate it could expand support in 2023, taking advantage of the fiscal flexibility that the European Union will continue to provide. However, in any case, the goal of returning to the primary surplus will remain (estimated in the draft budget at 0.7% of GDP). After all, it will be easier for him to achieve this goal if he reduces the deficit this year, since the fiscal adjustment distance he has to overcome will be shorter.

However, Deputy Finance Minister Theodoros Skilakakis told Parliament yesterday on the budget that “Greece, barring extreme scenarios, will not enter recession” in 2023 thanks to the Recovery Fund’s investment plans and other investment vehicles. “This year we will meet the deficit target of 1.7% of GDP, as well as a surplus of 0.7% in 2023, which is a conservative forecast, and therefore next year we will have the level of investment that we want to free up. dynamic,” he said.