Lower growth and higher inflation, as a result of the impacts from the energy crisis in the Middle East, are projected in the Annual Progress Report of the Medium-Term Fiscal-Structural Plan (MTFSP), which is being sent to the Commission today.
Growth at 2%, inflation at 3.2% – What the medium-term report shows
More specifically, the growth target is set at 2% from the 2.4% originally forecast by the Budget, while the inflation estimate is revised to 3.2% from 2.2%, as households are already receiving strong blows from waves of high prices.
At the same time, Athens’ document will reflect the new support measures that have already been announced, which will contribute to keeping growth at 2% for this year. All estimates are based on the assumption that Brent oil will trade at $89 per barrel this year, an assumption that does not appear to be confirmed by today’s data on the trajectory of “black gold.”
Primary surplus target at 3.2% – What it means for new benefits
In the fiscal field, the target for the primary surplus in 2026 increases to 3.2% of GDP from 2.8%, without incorporating new measures, which means that any benefits at the Thessaloniki International Fair will have a fiscal burden. Public debt as a percentage of GDP is expected to decline to 136.8% in 2026 from 138.2%, and to 130.3% in 2027. Nominal GDP is estimated at €261.3 billion this year and €272.8 billion next year.
Fiscal space for new measures – How much room exists
The report will also reveal the margin of net primary expenditures for new relief measures, as this is an indicator that constitutes a central reference point for fiscal trajectory and EU member states’ compliance based on the new Stability Pact.
According to the progress report, after the measures to address the energy crisis that have already been announced, Greece is 0.1% of GDP away from the spending limit for 2026 and 0.4% of GDP for 2027, meaning it has fiscal space of approximately €200 million for 2026 and an additional €1 billion for the following year. At the same time, the Public Investment Program increases to €7 billion from €6.35 billion due to the integration of new European funding instruments.
