The 2021 draft state budget is tabled under unprecedented conditions that make macroeconomic and fiscal forecasts uncertain, the Parliament’s State Budget Office said in a report on Thursday.
In its assessment over the draft budget, the Office said that macroeconomic forecasts see an 8.2 pct economic contraction this year and a 7.5 pct recovery in 2021, both optimistic compared with initial estimates. Fiscal forecasts call for a deficit of 14.7 billion euros, or 8.6 pct of GDP this year, and a primary deficit of 9.7 billion euros (5.7 pct of GDP).
For 2021, the draft budget envisages a significant improvement of fiscal data, with a deficit of 6.9 billion euros or 3.7 pct of GDP and a primary deficit of 2.1 billion euros (1.1 pct of GDP). The Office said that these estimates were uncertain because of the fluctuations of economic activity following the pandemic crisis.
“In conclusion, the 2021 draft budget includes large uncertainties in both macroeconomic and fiscal forecasts, attributed to the objective conditions prevailing,” it said. “The pandemic crisis has made fiscal policy the basic tool of dealing with the economic impact of the crisis and has led to a revision of priorities. For 2021, priorities are a gradual restoration of fiscal balance and supporting recovery through expansive fiscal measures and a fast recovery of the Greek economy.”