Greek Finance Minister Christos Staikouras forecasts an additional 436-million-euro space for 2019. This size does not match the range of potential additional social benefits, as a € 200m security pillow should be kept, whereas some part of the Services of General Interest’s (SGI) obligations to PPC, amounting to 150 million euros, has to be covered.
Introducing the 2020 budget, Christos Staikouras overaly stressed that “the policies that are now being designed and implemented are not class-oriented, but all intended for all Greeks; every available space is being utilized to the benefit of the lower classes and the middle class”.
Deputy Finance Minister Theodoros Skylakakis has also drawn a dividing line. He said, referring to the 2020 budget, that it “puts an end to the phenomenon of surpluses, which worked disastrously for the Greek economy”.
The State General Accounting Office is running a new expenditure ceilings exercise in order to get under control in advance cases of under-execution due to the inability to absorb those costs, while the final amount of the Public Investment Budget (PIB) and the revenues remains unclear.
The announcements should not be expected in November and will be made by the Prime Minister. By 20 December, the financial staff is planning to have voted, in addition to the budget, the tax bill (to be tabled next week) and project Hercules (to be tabled immediately after the ECB and SSM assessment, where the bill has already been sent) .
The IMF early repayment process is expected to be completed next week.
The basic sizes
The 2020 budget, which was tabled in Parliament, projects a primary surplus of 3.73% for this year, which creates a budget space of 436m euros. The debate will take place in four sessions and the vote will be held before Christmas.
As for 2020, the threshold is set at 3.56% of GDP, with a security margin of € 164 million in relation to the target set by enhanced supervision.
Growth is projected at 2% this year and at 2.8% of GDP by 2020, with unemployment falling from 15.9% to 14%. On a national budget basis, unemployment is also expected to drop from 17.4% to 15.6%, as reported by the Greek Statistical Authority (ELSTAT).
Private consumption is projected to grow by 1.8%, public sector by 0.6%, while investment is projected to run at a 13.4% pace. Exports will increase by 5.1% and imports by 5.2%, while harmonized inflation is projected at 0.7%.
As for debt, it is estimated that it will drop to 167% of GDP in 2020, compared to this year’s 173.3%. Privatization revenues are expected to total 2.44 billion euros.
It is recalled that yesterday the Commission in its report on the Greek economy estimated that the growth rate will be at 1.8% this year and will accelerate to 2.3% of GDP in 2020. As for the primary surplus of 2019, the Commission expects it to be fixed at 3.8%, with the surplus coming in at around 550 million. /ibna