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Greece’s Draft Budget 2020: Keys points on revenues and expenditure

The 2020 draft budget was submitted to the Greek Parliament by the Finance Minister, Christos Staikouras, on Monday. The draft foresees an economic growth of 2.8% and a primary surplus of 3.56% of GDP.

Key points of the draft budget 2020:

It  envisages a reduction in the unemployment rate to 15.6% of the workforce in 2020 from 17.4% in 2019.

Increase in private consumption by 1.8%

Increase of investments by 13.4%

Investment and private consumption are expected to support higher growth rates.

The Greek GDP is projected to reach 197.315 billion euros, while the general government debt is expected to fall by 5.5% points of GDP to 167.8% or 331 billion euros.

The new budget signals a radical change in economic policy from over-taxation and disinvestment towards growth, employment and an increase in the available income of all citizens, the draft budget introductory note said.

It incorporates all of the prime minister’s announcements for tax cuts in 2020 aimed at boosting private consumption and growth.

It envisages measures to expand the tax base – such as raising the required rate of e-spending for a tax-free allowance to 30% for all income brackets and the taxation of real estate based on real market prices.

These interventions also include a restructuring of general government spending and revenue and a restructuring of the Public Investment Progamme.

“With these actions the 2020 budget not only covers a fiscal gap that the new government inherited for the current and next year, but also creates fiscal space for a significant reduction of taxes, raising public investments and initiating a virtuous cycle of economic progress,” the budget introduction said.

Revenues & Expenditure

Tax revenue on goods and services are projected to reach 27.764 billion euros, down 3.0 billion from 2019 estimates.

Regular tax on real estate is projected to reach 2.708 billion euros, down 32 million from 2019 estimates.

Other taxes on production are projected to reach 1.151 billion euros, up 112 million.

Income tax revenue is projected to be 17.042 billion euros, up 488 million from estimates.

Transfers are projected to reach 4.603 billion euros, down 221 million from 2019 estimates because proceeds from ANFAs and SMPs have not been included.

Other revenues are projected at 1.754 billion euros, down 524 million from 2019 estimates due to lower estimates of dividends.

Tax returns are projected to reach 4.773 billion euros, down 127 million from 2019 estimates.

General government spending is projected to reach 57.009 billion euros in 2020, up 707 million from 2019.

Spending on payrolls is expected to reach 13.399 billion euros, up 415 million from 2019 estimates. It reflects higher regular pay and higher social insurance contributions.

Spending on social benefits is expected to reach 138 million euros, down 124 million from 2019 due to higher spending on a heating subsidy in 2019.

Spending the purchase of goods and services is expected to reach 1.069 billion euros in 2020, down 319 million from 2019, while spending on subsidies is estimated at around 89 million euros, down 136 million from 2019 due to the coverage of subsidised coastal shipping lines to remote islands via the Public Investment Programme.

Capital spending is estimated at 6.0 billion euros, down 500 million from 2019, while spending on the Public Investment Programme is projected to reach 6.750 billion euros (6.0 billion euros from EU funds and 750 million from national funds). [amna]

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One comment

  1. is it a budget law theyre talking about, or trying to legislate their fantasies into enforced ‘reality’?
    hard to tell anymore.