Greece’s 2024 budget, presented to Parliament on Monday, reveals a promising outlook for the country’s economy, with a projected growth rate of 3.0 percent, outpacing the 2.3 percent expansion expected for this year.
The draft budget outlines Greece’s ambitions to achieve a primary budget surplus of 2.1 percent of gross domestic product (GDP) in the coming year, excluding debt servicing payments. This follows a stated target of a 1.1 percent primary budget surplus for this year, a goal that will be met despite additional expenditures of 1.3 billion euros ($1.37 billion) for disaster relief in the aftermath of Storm Daniel, the nation’s most severe on record, and financial support for vulnerable households grappling with rising inflation and energy costs.
The draft budget also forecasts a reduction in Greece’s public debt, which is the highest in the eurozone, from 159.3 percent of GDP this year to 152.2 percent of GDP in 2024. This decline reflects the country’s return to economic normalcy after enduring four challenging years marked by the COVID-19 pandemic, the Ukraine conflict, and elevated prices.
Prime Minister Kyriakos Mitsotakis and National Economy & Finance Minister Kostis Hatzidakis emphasized Greece’s commitment to fiscal responsibility and adherence to the Stability Program. The government is eagerly awaiting credit agency assessments, particularly those of S&P Ratings on October 20th and Fitch Ratings on December 2nd, with hopes of securing an investment-grade rating from at least one of the agencies. In a significant vote of confidence, Moody’s upgraded Greece’s credit rating from Ba3 to Ba1 in September, citing political stability and ongoing reforms as key drivers of the country’s economic resurgence.
Moody’s projects Greece’s GDP to grow at an average rate of 2.2 percent annually from 2023 to 2027, driven by robust investment and consumption. This represents a substantial improvement compared to the pre-pandemic five-year average growth of 0.8 percent.
Additionally, Greece’s debt is anticipated to drop close to 150 percent of GDP by 2024, surpassing earlier projections, owing to stronger-than-expected GDP growth. In recent months, both DBRS Morningstar and Scope Ratings elevated Greece’s credit rating to investment-grade status, reflecting growing confidence in the nation’s economic trajectory.
