Greece approves 2024 budget with optimistic growth projections and investment focus

Greece has approved its 2024 budget, anticipating a boost in economic growth to 2.9 per cent from this year's 2.4 per cent, propelled by robust tourist revenues and increased EU funds for investment.

According to Reuters, the approval, backed by 158 votes, reflects the majority support from Prime Minister Kyriakos Mitsotakis's conservative government in the 300-seat house.

The Greek government, aiming to strengthen its financial position, sets a target of a 2.1 per cent primary budget surplus next year, an increase from the 1.1 per cent surplus recorded in the current fiscal year. The nation, once the most indebted in the euro zone, has seen a robust recovery since emerging from international bailouts in 2018, culminating in the restoration of its investment-grade status in 2023 after a 13-year hiatus.

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The 2024 budget allocates 1.4 billion euros to enhance income, including the long-awaited pay raises for civil servants, marking the first increase since 2010.

According to the Associated Press, Prime Minister Mitsotakis expressed optimism, aiming for a 3 per cent economic growth based on the anticipated increase in investment spending. The forecasted GDP, adjusted for inflation, is expected to surpass 200 billion euros, a notable achievement since 2010.

Mitsotakis addressed concerns over inflation, projecting an average of 2.8 per cent and allocating approximately 2.5 billion euros in subsidies to mitigate the impact on lower incomes, especially with soaring electricity prices.

Despite the positive projections, Mitsotakis acknowledged persistent challenges, emphasising the need for bolder and deeper reforms to address structural weaknesses in the economy. The minimum wage is set to rise for the fourth time in three years in April, aiming to counter opposition claims of a job market dominated by low-paying precarious positions. Furthermore, civil servants, numbering 660,000, are set to witness real pay hikes in January, the first in 14 years.

(With inputs from agencies)

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