The draft state budget for fiscal year 2027 has been submitted to Parliament by Minister of National Economy and Finance Kyriakos Pierrakakis, and has been referred to the relevant parliamentary committee.
It is worth noting that the draft budget has been submitted in an exceptionally uncertain economic environment, with fiscal planning incorporating even extreme scenarios regarding energy price trajectories and their impact on the Greek economy, as reported by Marios Christodoulou for parapolitika.gr.
2027 budget forecasts 2.3% growth
The new budget opens with a forecast for growth to accelerate to 2.3% in 2027, up from 2% this year, with investment and private consumption serving as the primary drivers. The Public Investment Programme is set to fill a significant portion of the gap left by the gradual wind-down of the Recovery Fund, with planning envisaging a steady increase in available capital. In 2027, €11 billion is projected to be channelled into the market — €4 billion from national resources and €7 billion from co-financed programmes. This figure rises to €12.2 billion in 2028, €13.2 billion in 2029, and reaches €14.2 billion by 2030. By the end of the four-year period, national resources are expected to stand at €4.2 billion, while co-financed expenditure approaches €10 billion.
Private consumption, although expected to slow slightly, will continue to perform at elevated levels, growing at a rate of 1.5% in 2027 compared to 1.6% this year. Exports of goods and services are projected to increase by 4.2%, with tourism and industry contributing to the improved outlook, while imports are also expected to grow at a strong pace.
Inflation remains a major source of concern. Despite income-support measures, rising energy costs — beyond fuel prices alone — are compounding an already heavy wave of price increases. Household disposable income is being squeezed by the rising cost of essential goods and services, keeping the cost-of-living crisis high on the economic policy agenda. The economic team has revised its inflation forecast for this year upward to 3.6%, from a previous estimate of 3.2%, while for 2027 a gradual decline to 2.4%–2.5% is projected.
Of particular note is the assumption that the budget has been drafted on the basis of a mean Brent crude oil price of $89 per barrel — significantly higher than the latest revised estimate of $82 for 2026. It is telling that last year’s budget had been drawn up assuming a mean Brent price of just $64. On the labour market front, unemployment is expected to continue its downward trend, falling to 7.9% in 2027 from 8.3% this year, according to the Labour Force Survey conducted by ELSTAT.
On the fiscal side, the budget starts from a primary surplus of 2.4% of GDP in 2027, while the General Accounting Office is examining a target of up to 3.7% of GDP, citing the strong performance of tax revenues — particularly the increased VAT receipts. Current-year estimates suggest, moreover, that the primary surplus will exceed 4% of GDP, compared to the latest forecast of 3.2% of GDP, generating additional fiscal headroom.
Primary expenditure is projected to increase by 3% in 2027, compared to 3.1% this year, in line with the expenditure ceiling set out under the new European fiscal framework. Public debt will remain on a downward trajectory, with the debt-to-GDP ratio falling from 136.8% in 2026 to 134.4% in 2028. Further reductions are expected to be supported by new early repayment moves, which this year total €12.84 billion.
This figure includes the early repayment of €6.94 billion in bilateral loans from the first support programme — known as GLF loans — which was carried out in June, as well as the repayment of €2.5 billion in loans to the European Financial Stability Facility (EFSF), scheduled for this October. In addition, a €1.2 billion reduction in the outstanding balance of Greek Treasury bills is planned, along with the early repayment of a bond of approximately €2.2 billion that would ordinarily mature in December 2027 but will instead be redeemed this year.
These moves will reduce future debt servicing needs. According to the Ministry of National Economy and Finance, they are expected to cut related expenditure by approximately €370 million per year, with the total benefit estimated at a minimum of €2.6 billion over a seven-year horizon. Based on the government’s planning, the debt-to-GDP ratio is expected to fall below 120% in 2029 and below 110% by 2031. The medium-term target is for the debt ratio to drop below 100% of GDP by the mid-2030s. This trajectory will depend, among other factors, on sustaining economic growth, achieving high primary surpluses, and maintaining favourable financing conditions.
Benefits and tax relief measures
The draft budget incorporates tax relief and income-support measures totalling €1.9 billion to be implemented over the 2027–2030 period, while leaving open the possibility of additional interventions in the spring. The precise margins will be reassessed in April, when Eurostat validates the 2026 growth and primary surplus data. Initial estimates suggest the potential for additional measures of up to €350–400 million, without breaching the primary expenditure ceiling set out under the Stability and Growth Pact.
The key measures include:
- Exemption of approximately 156,000 compliant self-employed professionals from turnover- and payroll-based surcharges in the calculation of minimum net income.
- A zero tax rate on income up to €20,000 for primary-occupation farmers and parents of three children.
- An increase in the permanent November bonus for pensioners, people with disabilities, and uninsured elderly individuals from €300 to €400 net, along with its extension to all pensioners aged 65 and over from November 2026.
- The introduction of a Christmas bonus of €500 gross for civil servants from 2027.
- The establishment of a special investment account for infants during the first two years of life, into which the state will deposit an amount matching the parent’s annual contribution, up to €1,200 per year, until the child turns 18.
- A reduction in social security contributions by 0.5 percentage points from April 2027 for the private sector.
- The abolition of the business licence fee (telos epitideuatos) from 2027 — for fiscal year 2026 — in regional areas and Thessaloniki, a 50% reduction in Attica in 2028, and its full abolition in Attica in 2029.
- A reduction in advance tax payments from 55% to 50% for self-employed individuals starting from fiscal year 2027, and a gradual annual reduction of 5 percentage points in advance tax payments for legal entities from fiscal year 2028, bringing the rate down from the current 80% to 50% over time.
- The introduction of accelerated depreciation over 6 years, down from the current 10, for business investments in machinery and equipment.
- The indexation of disability benefits to inflation.
- The abolition from 2027 of the ENFIA property tax on primary residences valued at up to €400,000 in settlements of up to 2,000 inhabitants, and up to 2,200 inhabitants in Western Macedonia.
The bill incorporating the new measures is expected to be put out for public consultation in the coming period, before being submitted to Parliament. By the end of October, new provisions are expected to be voted into law governing the settlement of overdue debts — incurred up to the end of 2024 — in up to 120 instalments, as well as new rules for loan servicers.
