The draft budget, presented to parliament today, provides for growth of 5.6% this year from 5.3%, which was projected in the draft. The Ministry of Finance lowered its forecast for 2023 from 2.1% in the project to 1.8%, and the inflation forecast for next year was revised down to 5% from 3% in the project. The main budget items for 2023 are disclosed by the Tax Board in its report.

“This revision of the Finance Ministry’s forecasts for growth is in line with the corresponding IMF estimates of 5.2% and 1.8% respectively, while the European Commission looks more optimistic for the current year (6.0%), but more restrained. for 2023,” notes the Hellenic Tax Council in its opinion on the draft state budget for 2023. Therefore, the GDP in absolute terms for 2023 is supposed to be formed according to the budget at almost the same level as for the project (i.e. 194.850 million euros in constant 2015 prices against 194.506 million for the project).

The Fiscal Council also notes that the upward revision of the price level is accompanied by the persistence of inflation at a high level (9.5% according to the latest data for October). The 2023 budget scenario provides for a slight further slowdown in private consumption and investment, which are 1% and 15.5% respectively, compared to 1.3% and 16% in the project.

A possible recession in the EU countries, which are Greece’s main trading partners, will negatively affect Greek exports of goods and services (tourism), which are projected to fall from 9.7% in 2022 to 1% in 2023.

On the other hand, efficient use of Recovery Fund resources is expected to maintain investment momentum with a 15.5% increase in gross fixed capital formation in 2023 compared to 10% in 2022. This forecast has a significant degree of uncertainty associated both with expectations businesses and households, as well as rising borrowing costs.

Fiscal forecasts

The state budget for 2023 concerns the first year after the end of the period of increased oversight of the country. Planned budgetary interventions reflect the need to deal with the worsening energy and inflationary crisis, while interventions to combat the pandemic are being scaled back.

For the current year, the draft budget is revising upward the 2022-2025 Stability Program forecasts for both the general government balance sheet from -4.4% to -4.1% and the main result from -2.0% to -1 .6%, in line with the forecasts of the European Commission. For 2023, he is revising forecasts for the worse, from -1.4% to -2% and from +1.1% to +0.7%, respectively, which is lower than the forecasts of the European Commission.

State debt

The projections of the draft budget on the amount of debt of the Central Administration, the Central and Central Government do not differ from the projections of the draft plan, maintaining their increasing rate of about 2 billion euros per year for 2022 and 2023. .

However, as a percentage of GDP, public debt is projected to decline spectacularly, with general government debt falling by 25 percentage points this year and 9.6 percentage points next. This is due to a large projected nominal GDP growth of 16% for 2022, mainly as a result of inflation but also strong real growth.

This is also due to a significant upward revision of inflation for 2023, resulting in an increase in nominal GDP of around €4 billion in CAP versus CAP and a GC debt ratio of just below 160%. In the direction of reducing public debt, a primary surplus is forecast for 2023, which remains at about the level of GDP (1.6 billion euros).