The Council of the European Union and the European Commission have received – for the first time – the annual progress report for the year 2025, regarding the targets set in the Greek Medium-Term Fiscal-Structural Plan (MSP) 2025-2028, by the revised European economic governance framework that entered into force on 30 April 2024.

According to the annual progress report, a growth rate of 2.3%, an investment growth rate of 8.4%, a private consumption growth rate of 1.7%, an export growth rate of 4.0%, and an import growth rate of 3.8% are projected for 2025. The harmonized consumer price index is expected to decelerate to 2.4% in 2025 from 3.0% in 2024.

The state budget primary balance, taking into account the announced fiscal measures and the 2024 performance, is expected to be 3.2% in 2025 compared to 4.8% in 2024, and the overall general government balance is expected to be 0.1% in 2025 compared to 1.3% in 2024. The debt-to-GDP ratio declined from 163.9% in 2023 to 153.6% in 2024 and is expected to further decelerate to 145.7% in 2025.

The annual growth rate of net primary expenditure in 2025 is expected to reach 4.5% in 2025 against a target of 3.7%. This deviation is within the fiscal margin of 0.3% of GDP for annual growth set by the European framework, taking into account that the cumulative expenditure growth in 2024 and 2025 is within the relevant limits. For the year 2024, taking into account the significant tax evasion reduction measures that are perceived as active revenue measures and counted deductively in the net expenditure target, net primary expenditure is estimated to have declined by 0.3% against a growth threshold of 2.6%.

The annual progress report includes fiscal interventions for 2024 and 2025. These interventions aim to strengthen disposable income and promote sustainable growth and social cohesion, without compromising the prudent fiscal path our country has followed in recent years.

Important fiscal measures implemented in 2024 include the reform of the public sector wage bill, the reduction of taxes for families with children, the 50% reduction of the business tax, the increase of the birth allowance, the extension of the maternity allowance, and other measures to address natural disasters.

For 2025, fiscal measures foreseen in the budget and already being implemented include an additional reduction of insurance contributions by one percentage point, an increase in public sector wages following the increase of the minimum wage from EUR 830 to EUR 880, and the abolition of the business tax, the incentives for innovation, mergers and acquisitions, the self-taxation of on-call time for NHS doctors, the exemption from the tax on health insurance premiums for children’s health contracts, the implementation of the My Home II programme and other measures addressing issues related to demographic and housing problems.

In addition to the above, measures amounting to EUR 1.3 billion, announced after the submission of the 2025 state budget, are being implemented based on the positive fiscal performance in 2024 linked to the performance of measures to reduce tax evasion. These include:

– A permanent increase in the National Public Investment Program by 500 million euros,

– permanent reimbursement of one rent, to low and middle income families, at an estimated annual cost of €230 million,

– permanent annual financial assistance of 250 euro to 1.44 million pensioners, uninsured elderly and disabled persons, at an estimated annual cost of 360 million euro,

– extension of the exemption from pharmaceutical costs for low pensioners, at an annual cost of EUR 23 million,

– Granting a risk allowance to members of the security forces at an annual cost of EUR 222 million.

The annual progress report on the Greek economy makes particular reference to the fact that our country has consistently sought and succeeded in reducing tax evasion through the implementation of important reforms, including:

– the interconnection of POS with cash registers,

– the full implementation of the “myDATA” platform for the electronic declaration of business income and expenses,

– the extension of the mandatory acceptance of electronic payments in retail trade,

– real estate transactions via electronic means of payment,

– the new framework for the minimum taxable income for self-employed persons,

– the increase in fines for cash transactions over EUR 500,

– the payment of social security benefits using prepaid cards,

– the digitalisation and automation of the tax authority’s controls; and

– The implementation of the digital work card, which records the actual hours worked by employees.

The estimated direct positive impact on public revenues of the main measures to combat tax evasion is estimated to exceed €2 billion per year.

Finally, the annual progress report reports on the progress of all reforms and investments included in the Medium-Term Fiscal-Structural Plan (MTP) 2025-2028.