Stability program: Average growth 3.6% – Lower unemployment by 4.5% in 2022-2025

By Tasos Dasopolos

An average annual growth of 3.6% and a reduction of unemployment by 4.5% for the period 2022 – 2025 envisages, among other things, the stability and growth program, which was presented today by the Minister of Finance to the cabinet.

Based on the presentation of the Minister of Finance Mr. Christos Staikouras and the Deputy Minister of Finance Mr. Thodoros Skylakakis, the growth is expected to slow down for this year to 3.1% from 4.5% provided for in the 2022 budget to then accelerate to 4.8% in 2023 and then will reach 3.5% in 2024 and 3.3% in 2025.

This means that for the period 2022 – 2025 the average annual growth after the two consecutive crises of the coronavirus and inflation will exceed 3.6%.

At the same time, based on the forecasts of YPOIK, the critical size of inflation will burden the economy practically only in 2022, when on an annual basis it is expected to reach 5.6% to fall significantly to 1.6% in 2023 and to increase marginally at 1.7% to 1.7% for 2024 and 2025.

The crisis is not expected to significantly affect the reduction of unemployment which is expected to reach 4.5% for the period 2022 -2025. In particular, the annual unemployment rate is expected to decrease this year to 13.9% from 14.7% in 2021 and to continue to decrease to 12.2% in 2023, to 11.2% in 2024 and to 10.2% in 2025.

Fiscal adjustment

All this will develop in parallel with a significant fiscal adjustment through which the economy will return to primary surpluses from 2023, while debt as a percentage of GDP is expected for the period 2022-2025 to decrease by 46.8%.

In particular, for this year the primary balance will have a deficit of 2% of GDP higher by 0.6% of GDP than the 1.4% of GDP projected by the budget due to the measures against the accuracy that are already being implemented and will be implemented until the end of the year.

In 2023 the budget is expected to show after three years a primary surplus of 1.1% of GDP, which will almost double to 2.1% of GDP by 2024 and will reach 2.4% of GDP in 2025.

Respectively, the debt as a percentage of GDP due to the high growth will have an overall reduction of 46.8%. From 193.3% recently announced for 2021, it is expected to decrease to 180.2% at the end of 2022 and will continue to decline to 168.6% in 2023, to 155.2% in 2024 and to 146.5 % in 2025.

At the same time, the goals of the financial staff remain the continuation of the change of the production model with the steady increase of its share in the GDP of investments and exports, the acquisition of the investment grade in 2023.