ATHENS (Reuters) -Greece expects its economy to grow faster in 2026 and its public debt to decline by almost 8 percentage points, thanks to higher investment and robust consumer spending, according to the final budget plan.
The government expects economic output to rise 2.4% next year, outperforming Europe’s major economies, following expansion of 2.2% this year, partly with the help of European Union recovery funds.
Greece projects a primary surplus, which excludes debt servicing costs, of 2.8% of gross domestic product next year, on the back of higher tax revenue and lower unemployment.
Since emerging from a bailout in 2018, Greece has regained its investment grade ratings in 2023, revived its banking system and relied solely on debt markets for its borrowing needs.
Its public debt – now the highest in the euro zone – is seen dropping by 7.7 percentage points to 138.2% of GDP in 2026 from 145.9% this year and to below 120% in 2029.
“Our target is to stop being the most indebted country in Europe in the next years,” Finance Minister Kyriakos Pierrakakis said at a press conference presenting next year’s budget plan.
The new budget includes tax breaks of about 1.7 billion euros ($1.96 billion) to boost households with children and fund pension hikes amid the rising cost of living, funded by the primary surplus.
Greece should achieve a primary surplus of about 2% annually, compared to 3.7% this year, to be able to cover its interest rate payments and keep its huge debt sustainable.
The country plans to borrow about 9 billion euros next year from bond markets and repay more bailout loans in December ahead of schedule.
($1 = 0.8676 euros)
(Reporting by Lefteris PapadimasEditing by Alexandra Hudson, Kirsten Donovan)
