The 2026 budget includes support measures and tax cuts totaling €2.4 billion, with an additional €800 million “cushion” earmarked for extra support measures for vulnerable households in 2027.
The interventions announced at the Thessaloniki International Fair and included in the budget, headlined by the tax reform, reach €1.76 billion and have already begun implementation, with salary increases for uniformed personnel retroactively from October 1, 2025. However, the total fiscal intervention package for next year amounts to €2.4 billion, as the permanent measures announced last April will also remain in effect in 2026, primarily the rent subsidy – which will be distributed by the end of November – and the €250 allowance for low-income pensioners.
What the budget includes
In detail, the 2026 budget includes:
- Reform of the income tax scale, focusing on families with children, young people and the middle class, with a fiscal impact of €1.218 billion.
- Non-offsetting of 50% of pension increases with personal difference, a measure worth €75 million.
- 30% VAT reduction in North Aegean islands, Samothrace and small Dodecanese islands, costing €25 million.
- Gradual abolition of property tax in settlements up to 1,500 inhabitants, with €38 million for 2026.
- Reform of living standards presumptions.
- 50% reduction of minimum income for freelancers in small settlements, costing €10 million.
- New salary scales for the Armed Forces, with a fiscal result of €162 million.
- Savings from the new Armed Forces structure, yielding €77 million.
- Increase in conscript compensation, costing €25 million.
- Salary reform in Security Forces, worth €127 million.
- Salary reform for the Ministry of Foreign Affairs, worth €30 million.
- Special duty allowance in correctional facilities, €6 million.
- Tax-free library allowance for university faculty and researchers, €6 million.
- Pharmaceutical Innovation Fund, €50 million.
- Abolition of subscription television fee, worth €22 million.
In macroeconomic terms, despite uncertainty in the global economic environment, the Greek economy is projected to continue for a sixth year recording significantly higher real growth rates compared to the eurozone average. The growth rate is expected to reach 2.2% in 2025 and 2.4% in 2026, versus 1.3% and 1.2% for the eurozone, respectively. Nominal GDP is expected to increase from €248.7 billion in 2025 to €260 billion in 2026. Inflation is expected to deescalate from 2.6% in 2025 to 2.2% in 2026.
The investment growth rate is expected to increase from 4.5% in 2024 to 5.7% in 2025 and 10.2% in 2026, as a significantly expanded public investment program is expected to be implemented in 2026, combined with the momentum shown by private investments, with resources worth €16.7 billion, compared to €14.6 billion in 2025. The unemployment rate, having fallen to single digits by 2025, is projected to improve further in 2026, by half a percentage point of the workforce, reaching 8.6%.
Published in Moneypro of Parapolitika
