The new package of tax cuts and income support measures from the Thessaloniki International Fair for large categories of citizens that will take effect from January 1, 2026, as well as the rent rebate and the payment of an additional 250 euros to pensioners that were announced earlier this year, will be incorporated into the draft of the new budget which is expected to be submitted to Parliament on Monday, October 6.
The dual objective of the budget
The 2026 budget draft will send the message that next year’s economic policy will serve a dual objective: on one hand, maintaining high growth rates, and on the other hand, achieving strong fiscal performance that ensures primary surpluses which are utilized for the gradual reduction of public debt and the return of social dividends to the vulnerable and relief to the middle class.
Growth forecast set at 2.4% for 2026 in the new budget draft
According to sources, the new budget draft will forecast that the Greek economy will grow at a rate of 2.4% in 2026. This represents a higher performance than this year’s, where the GDP growth rate is expected at 2.2%. Private consumption will make a significant contribution to GDP growth in 2026 with a projected increase of 1.7%. Investments are expected to show dynamic growth of 10.2%, which is also related to the acceleration of Recovery Fund project implementation.
Exports are expected to increase by 4.5%, while imports are expected to grow at almost the same rate (4.6%). Inflation is projected to move at levels of 2.2%, while unemployment is expected to record a new decline to 7.4% compared to 7.8% this year.
The forecast for the primary surplus in 2026 will be 2.4% of GDP, fueled by high growth rates that generate income and by tax evasion containment measures that bring taxable material to the surface. However, it should be noted that both in 2024 and this year, the primary budget result significantly exceeded the initial target. Last year it reached 4.8% of GDP, while this year it is moving toward 3.5% of GDP. This creates reasonable expectations that 2026 could be another year with an overachievement of the primary surplus target, with all that this means for the fiscal space for new social interventions.
The economy’s growth rates combined with additional revenue from tackling tax evasion and the level of primary surplus shape the fiscal space that can be utilized each year for social policy interventions and support for the vulnerable. Therefore, if performance in these areas is higher than initial targets this year, it will open the way for new support measures next spring when estimates for fiscal figures and 2025 GDP are finalized.
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