Greece will achieve higher-than-expected primary budget surpluses in the three-year period ending in 2026 and its debt will drop more than 10 percentage points from 2024 to 2026, according to the European Commission’s fall forecast.
Responding to a question by Kathimerini, outgoing European Economy Commissioner Paolo Gentiloni called the drop in the debt a “great achievement.” Asked to explain Greece’s higher-than-average inflation, he said it had to do with significant hikes in food prices affected by the devastating floods in the region of Thessaly in September 2023, the spike in olive oil prices and energy price rises. He added that the inflation rate will decline in Greece, as well.
The EU forecasts a primary budget surplus, which excludes debt servicing, of 2.9% of GDP in 2024 and 2025 and 3.2% in 2026. If attained, the 2024 primary surplus will be the third largest in the EU.
This exceeds even the latest estimates by the Ministry of Finance, ahead of the submission of the final budget draft, of a surplus 2.6-2.7% of GDP, significantly higher than the 2.1% estimated when Greece submitted its latest stability program estimates to the European Union last April. The 2025 budget forecasts a 2.4% surplus for next year and the submitted medium-term stability plan calls for a similar surplus in 2026.
In the end, the EU forecasts might, indeed, be a little optimistic. According to a high-ranking Finance Ministry official, the differences in estimates rise from the fact that the EU has not taken into account the supplementary 2024 budget, which added €400 million to the Public Investment Program. Additionally, for 2025 and 2026, the government intends to spend an additional €500 million, making full use of the rise in spending (3.7% in 2025 and 3.6% in 2026) that the updated Stability Pact allows. As for the public debt, the Commission forecasts it will reach 153.1% of GDP in 2024, 146.8% in 2025 and 142.7% in 2028, slightly higher than the government estimates.