2023-08-06 10:39:54
The increase in salaries in the State, pensions and family allowances will be included in the new budget for 2024. This is evident from the circular of the Deputy Minister of National Economy Thanos Petralias to the ministries and competent bodies for the preparation of the new state budget, as it foresees an increase in State expenditure by 4 billion euros.
In particular, according to the instructions of Mr. Petralia, in 2024 the ceiling of the fund for the General Government is adjusted to 72.7 billion euros from 68.7 billion euros, which is the upper limit this year. At the same time, the ceiling for regular budget spending will rise to €68.78 billion, an amount to which is added €6.9 billion in interest costs to cover debt obligations in 2024, up from €5.1 billion this year .
Funds for the investment projects to be financed by the Public Investment Program (PIP) will amount to 8 billion euros, while 4.34 billion euros will be given additionally through the Recovery Fund. Increased by 900 million euros – to 22.6 billion euros in 2024 from 21.7 billion euros this year – is the budget of the Ministry of Labor for social transfers. This includes salaries, pensions, allowances and subsidies, while the ceiling for resources in Health and Education is also increased by 400 million euros (5.096 billion euros) and 180 million euros (5.935 billion euros), respectively.
As stated in the circular, “highly uncertain costs are not included, which depend on international developments and will be addressed through the use of state budget reserves”. There is also a special emphasis on the difficult financial environment created by the evolving energy crisis, and it is emphasized that the strengthening of the reviews on spending is of increased importance, with the focus being on the horizontal action of savings in the energy sector. At the same time, it is noted that “the goal of creating fiscal space also continues intensively through actions to increase revenues or utilize the assets of the entities”. Agencies must submit proposals for the new budget by September 1, without breaching the ceilings set on spending.
Meanwhile, scenarios for new support measures focusing on vulnerable groups are also on the table, scenarios assessed against forecasts of a larger primary surplus in 2023. The target for this year is 1.1% of GDP and competent sources leave open the possibility of even a surplus of 1.4% of GDP. If this happens, fiscal space is “freed up” for €400 million in benefits, with increased funding for the heating allowance and a new subsidy scheme for electricity bills being at the “frontline”. However, as relevant officials point out, the measures will definitely be targeted and at low cost. Because next year the main focus will be on consolidating public finances and boosting tax revenues through greater growth.
It is noted that, until the landscape in Europe is clarified with the new Stability Pact, Greece is moving on the basis of the Stability Program 2023-2026. In it, a primary surplus of 2.1% of GDP is foreseen for the next year, while the increase in GDP will it is 3% from 2.3% estimated this year. At the same time, the debt of the General Government will decline in 2024 to 150.8% of GDP, while inflation will also have a downward course, which is expected to slow down to 2.4% from 4% this year.
Source: RES-MPE
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