The state budget for 2024 and the Medium-term Fiscal Framework 2024 – 2026 were submitted to the Plenary Session of the House of Representatives on Thursday, marking the start of the procedures for its discussion and voting until the end of the year.
The budget is in surplus with fiscal surplus amounting to 2.2% of GDP and primary surplus to 3.6% of GDP.
The state budget for the year 2024 shows revenues amounting to €9,892 million, recording an increase of 9.6 % compared to the previous year, while expenses (excluding expenses for repayment of loans and Investments) are expected to increase by 17.7% and reach €10,584 million.
The total expenditure of the 2024 State Budget (including loan repayments, interest and investments) amounts to €13,040.7 million. The distribution of expenditure in the three main expenditure categories is as follows, (a) Fixed Fund expenditure €4,340.8 million, (b) Regular expenses €7,221.1 million, and (c) Development expenses €1,478.8 million.
Development expenses are expected to increase from €1,295,051 in 2023 to €1,478 .828 in 2024, a 14.2% increase.
The main source of revenue is taxes, as about 81% of total revenue comes from direct and indirect taxes. Direct tax revenue is expected to increase by 5.7%, while indirect tax revenue is expected to increase by 7.4%. Non-tax revenues, such as sales of goods and services, rents, rights and transfers/grants, are expected to increase by around 24.5%.
In terms of expenditure, the most significant increase is seen in personnel expenditure, including pensions and gratuities, with an increase of around 14%. This increase is mainly due to increased indexation allowances and contributions to insurance funds such as the Social Insurance Fund and the NHS.
Operating expenses are projected to increase by approximately 7% in 2024 and reach €1,168, 4 million compared to €1,093.3 million in 2023. The increase is mainly due to increases in maintenance/repair funds and provisions for defense and policing expenses.
Transfer payments are projected to increase by approximately 16%, from €3,198.5 million in 2023 to €3,709.7 million in 2024. Transfer payments are mainly made up of social benefits, grants to public and private state organizations (including state universities), sponsorships to Local Government Authorities, State contributions to Social Insurance Funds and NHS, and our contribution to the EU budget.
The main increases for 2024 concern the increase of the General Government Contribution to TKA, the General Government Contribution to the NHS, grants to state organizations and local self-government authorities and social welfare benefits by approx. It is noted that, in social welfare benefits, an increase in welfare for the Solidarity Fund of €25 million is included.
It is also noteworthy that the expenses for the servicing of the public debt show a significant increase of 68.5%, and in particular are estimated at €3,379.2 million compared to €2,005.5 million in 2023.
Forecast for steady growth until 2026
According to the explanatory memorandum for the budget submitted to Parliament, the GDP is projected to increase from 28,876.4 million euros in 2023 to 30,417.9 million euros in 2024, marking an increase of 2.9%, compared to an increase of 2, 5% projected for 2023. Growth is projected at 3.1% for 2025 and 3.2 for 2026.
The unemployment rate is projected to decrease from 6.5% in 2023 to 5 .8% in 2024.
Inflation is projected to remain at relatively low levels, rising from 3.5% in 2023 to 2.5% in 2024 to stabilize at 2% in 2025 and 2026.
The fiscal balance as a percentage of GDP is expected to increase from 1.9% in 2023 to 2.2% in 2024.
The primary surplus as a percentage of GDP is projected to increase from 3.3% in 2023 to 3.6% in 2024.
Capital spending is projected to decline from 3% of GDP in 2023 to 2.8% of GDP in 2024.
Government debt is projected to continue its decline as a percentage of GDP, from 80.9% in 2023 to 72.9% in 2024 and 67.3% and 60.1% in 2025 and 2026 respectively.
Public external debt is projected to continue its decline, from 75.5% of GDP in 2023 to 69.0% in 2024.
The revenues of the General Government are expected to increase from 12,361.4 million euros in 2023 to 13,166.2 million euros in 2024.
The expenditures of General Government is expected to increase from 11,804.0 million euros in 2023 to 12,506.8 million euros in 2024.
The budget surplus is expected to increase from 557.4 million euros in 2023 to 659.4 million euros in 2024, i.e. to 2.2% of GDP from 1.9% in 2023.
The primary surplus of the General Government is expected to increase from 938.8 million euros or 3.3% of GDP in 2023 to 1,087.3 million euros or 3.6% of GDP in 2024.