The increased revenues qualify for new support measures by the end of the year

By Tasos Dasopoulos

The higher growth will provide the budgetary margin for the next package of support measures, which will include the second accuracy check (or something similar) and the last three-month fuel subsidy. At the same time, of course, it will help indirectly from 2022 and in the implementation of 2023 reliefs.

The recent announcement of ELSTAT for 7% growth in the first quarter of the year, gives reasonable hopes to the financial staff, that at the end of the year the growth can exceed the 3.5% that the “conservative” IMF predicts for Greece this year, but also the European Commission. This is due to the fact that both organizations predict that, in addition to the recovery of tourism, both investment and exports will have double-digit growth rates this year despite the energy crisis.

During yesterday’s specialization of the measures, the ANYPOIK Mr. Theodoros Skylakakis admitted that since April, the upward trend of revenues from tourism has been seen. If the well-founded expectation of industry professionals is fulfilled that tourism will return to the turnover of 2019 this year and the tourist season will be extended until mid-November, as happened in 2021, we will have positive developments in revenue.

Expectations for large revenue overruns

If the turnover of tourism reaches or exceeds 18 billion euros where it had reached in 2019, compared to the 15 billion euros estimated by YPOIK, tourism will easily give an additional 1.5% to GDP, regardless of the further increase that will arise from other economic activity. Given that an extra-GDP unit could increase revenue by about € 500 million around September, the CFO can safely expect additional revenue of around € 750 million for the full year.

Yesterday’s measures regarding the Fuel Pass 2 and the early return of the farmers’ EFK at a cost of 376 million euros were financed by the overperformance of the economy in the five months of January-May, without calculating the lump sum payment of about 600 million euros from ENFIA. If tourism pays off as expected, an additional 700-750m euros could be earmarked. Then, we will see a second accuracy check for the financially vulnerable and a third fuel subsidy for the last quarter of the year. In addition, to government revenues will be added by the end of the month or early next year, 650 million euros from bond profits approved in the last Eurogroup, along with the exit of Greece from enhanced supervision. This money is not calculated in advance in the regular income and is supposed to be used to reduce the debt. At the present time, however, they can be used, so as not to increase. That is, to cover real needs, which otherwise, would be covered by borrowing.

The reliefs of 2023

So far, budget support measures of around € 2 billion have been estimated for this year. Of this € 490 million is the first Fuel Pass, subsidies on diesel, taxis, farmers and the first precision check. To these are added yesterday’s measures amounting to 375 million euros and 1.1 billion from the participation of the budget in the intervention for the electricity tariffs. Together with the last part of the support measures that will be decided in September, they will exceed 2.5 billion euros.

The two main measures that YPOIK wants to implement in 2023 are the abolition of the special solidarity contribution for the public and private sector and the maintenance of the reduction of insurance contributions by 3%. The two measures have a budget cost of 2.1 billion. The fiscal space to implement them will result from the increased growth of 4.8% next year and the non-repetition of some support measures of 2022.