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Greek Gov’t should take focused support measures, says Parliament Budget Office

The Greek government should take focused support measures with a temporary duration, the Parliament’s Budget Office said in its quarterly report released on Thursday.

The Budget Office said that these measures should be temporary, focused and funding by additional current revenue so that they do not burden the public debt. At the same time, the Office recommended against taking horizontal support measures and noted that in current conditions there is no room for general interventions – as it happened during the pandemic – as they could deteriorate an already fragile fiscal condition of the country.

The report noted that the Greek economy grew by 7% in the first quarter of 2022, exceeding a 5.4% average growth rate in the Eurozone, while the unemployment rate fell significantly to 12.5% in April from 17.2% in April last year and employment grew by 10.8%. It also stressed that the payroll cost index eased 1.9% in the first quarter, compared with the same period in 2021, while the current account deficit was almost two-and-a-half times more than in the first quarter of 2021 (6.4 billion from 2.6 billion euros, respectively).

The inflation rate is steadily rising, with the harmonized index rising to 10.5% in May and the national index rising to 11.3%. The primary result of the general government showed an improved by 5.4 billion euros, while the public debt/GDP ratio continued falling, helped by a significant increase in nominal GDP and rising inflation.

The Budget Office expects a slowdown in the growth rate of the country’s GDP in the second quarter of 2022, depending on tourism revenue, progress in the Recovery Fund, the impact from higher energy cost and an increase in borrowing cost.

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