With growth forecast at 2.3% in 2027, compared with 1.2% in the eurozone, and investment set to rise by 7.9%, the draft state budget points to continued growth in the Greek economy, alongside a reduction in public debt and measures to boost incomes, according to National Economy and Finance Minister Kyriakos Pierrakakis.
Presenting the draft to Parliament’s Standing Committee on Economic Affairs, the minister said the Greek economy had become more resilient to international turbulence, citing growth, fiscal credibility and the restoration of international confidence.
“Greece is entering a new era, and this time we have the ability to set the terms of our progress ourselves,” he said.
Growth of 2.3% and unemployment at 7.9%
The draft budget forecasts that the Greek economy will grow by 2.3% in 2027, compared with 1.2% in the eurozone, marking the seventh consecutive year in which growth outpaces the European average.
Real per capita GDP is forecast to rise by 2.6%, compared with 1% in the eurozone, while unemployment is expected to fall to 7.9%, its lowest level since 2008.
Meanwhile, compensation per employee is forecast to increase by 3.9%, as inflation eases to 2.6%. On the basis of these forecasts, the minister said real wages would rise by 1.4%.
Mr Pierrakakis acknowledged, however, that high prices remain the biggest problem facing Greek households, noting that boosting purchasing power requires both immediate measures to protect incomes and increases in productivity and investment.
Investment up 7.9%; Public Investment Programme at €11bn
The minister placed particular emphasis on rising investment, which is forecast to increase by 7.9% in 2027, compared with 1.7% in the eurozone, reaching 18.6% of GDP, up from 17.8% in 2026.
He said investment stood at 11% of GDP in 2019, while the European average is 21%, highlighting the investment gap that the Greek economy still needs to close.
Against this backdrop, the Public Investment Programme will increase from €9.8bn in 2026 to €11bn in 2027, with the aim of sustaining growth after the completion of the Recovery Fund.
A new €1.5bn lending and guarantee programme for small and medium-sized enterprises is also being rolled out, aimed at widening access to finance and supporting their modernisation.
Primary surplus of 3.3% and debt at 128.8%
On the fiscal front, the primary surplus for 2026 is estimated at 3.6% of GDP. For 2027, the draft forecasts a primary surplus of 3.3% and an overall fiscal surplus of 0.3%.
At the same time, public debt is expected to fall to 128.8% of GDP in 2027, from 209.4% in 2020, a decline of more than 80 percentage points in seven years.
The minister said the government would continue its policy of early debt repayments, which are expected to total €12.8bn in 2026, reducing the state’s future financing needs.
He also cited the country’s improved international credibility, noting that Greece borrows at a lower interest rate than France and Italy, at a time when bond markets are under pressure.
€1.4bn in measures to address the energy crisis
Speaking about the energy crisis, Mr Pierrakakis said the total value of measures introduced since April had reached €1.4bn. Of this, €862m is for tackling energy costs and €541m for permanent social support measures.
The measures include interventions on the prices of diesel and unleaded petrol, as well as a two-pronged package for heating oil: a subsidy at the pump and a 30% increase in the heating allowance.
He said heating oil was selling for €1.49 a litre at some petrol stations and that, after the allowance is applied, the price could fall below €1.35.
The government is also seeking joint European measures to tackle high energy prices, while planning investments of nearly €1bn by 2028 to strengthen energy resilience, with a focus on energy storage, efficiency and infrastructure upgrades.
€2.2bn in tax relief and measures on incomes and housing
According to the minister, the measures announced at the Thessaloniki International Fair will have a fiscal cost of about €2.2bn in 2027.
The measures he outlined include:
- Cutting advance tax payments for self-employed professionals who meet their tax obligations from 55% to 50%.
- A zero tax rate on incomes of up to €20,000 for farmers whose main occupation is farming and for families with three children.
- Increasing the permanent annual support payment for pensioners from €300 to €400 and widening eligibility.
- Introducing a gross Christmas bonus of €500 for civil servants and public officials.
- A further cut in social security contributions of half a percentage point from April 2027.
- Continuing to raise the minimum wage, with the aim of reaching €1,000 in January 2028.
- A new €2bn housing programme, “My Home III”.
He also highlighted the New Generation Investment Account, through which the state will contribute one euro for every euro a family saves, up to €1,200 a year. The aim is to build up capital gradually to strengthen young people’s financial resources as they enter adulthood.
In closing, the minister argued that economic policy should not be limited to managing crises, but should create stable conditions for improving living standards through higher wages, more investment and meaningful opportunities for the next generation.
“A government has a responsibility to support citizens through hardship. Above all, however, it must give them the strength to overcome it,” he said, adding that the challenge for the coming period was to turn fiscal progress into sustained income growth and convergence with Europe’s stronger economies.