21 November, 2007
The Greek economy is expected to grow by 4.0 percent next year, with private consumption projected to grow by 3.5 pct, up from 3.2 pct this year, and investments to grow by 10.5 pct (from 8.9 pct this year), the Greek minister said.
Public consumption is projected to slow to 0.7 pct next year from 4.2 pct in 2007, with total domestic demand at 4.5 pct. Greek exports are expected to rise by 7.3 pct and imports to rise by 7.8 pct. Employment is expected to rise by 1.9 pct in 2008, with unemployment falling to 7.4 pct (from 8.3 pct this year), while productivity will grow by 2.2 pct and inflation to rise to 2.8 pct next year form 2.7 pct in 2007.
The central government’s deficit is projected at 3.4 pct of GDP next year, from 4.1 pct this year, while the general government’s deficit to fall to 1.6 pct of GDP, from 2.7 pct this year, including an extra charge of 1.11 billion euros (Greek contribution to the EU following the country’s recent GDP upward revision).
Budget credits are projected at 24.1 pct of GDP from 24 pct this year, with spending on wages and pensions rising by 8.9 pct and payments to pension funds and social protection spending will rise by 17.2 pct next year.
The Public Works Program envisages spending totalling 9.3 billion euros, from 8.7 billion euros this year and 8.184 billion in 2006, or 3-3.7 pct of GDP for the period 2000-2008, compared with a rate of 2.4-2.6 pct in the Eurozone over the same period. The program also includes funds for the reconstruction of regions hit by summer fires (200 million euros).
Regular budget revenues are expected to grow by 12.1 pct next year to 58.070 billion euros, with tax revenues totalling 6.27 billion euros. The government aims to complete a tax reform program by submitting a draft legislation to parliament over the next few weeks. The budget also envisages harmonizing a special consumption tax on fuel projects, and gradually reducing incomes tax factors to reach 25 pct and 35 pct by 2009.
Proceeds from direct taxes are projected to rise by 11.5 pct to 22.040 billion euros, while proceeds from indirect taxes to grow by 13.9 pct to 32.605 billion euros.
Greece’s 2008 budget aims to cut the fiscal deficit to 1.6 pct of GDP and reduce the country’s public debt to 91 pct of GDP, from 93.4 pct this year, Economy and Finance Minister George Alogoskoufis said on Tuesday.
Speaking to reporters, presenting the draft 2008 budget, the Greek minister stressed the budget aimed also at offering fundamental support to low income families, effectively combating tax evasion, supporting regional growth, payment of financial obligations to municipal authorities and pension funds.
Alogoskoufis said the budget also envisaged higher social benefits, creating a Social Cohesion National Fund worth 2.0 billion euros annually over the next four years, an increase of 9.4 pct to Healthcare and a 6.5 pct rise in Education, while the Public Works Program will total 9.3 billion euros in 2008, up 6.9 pct form 2007.
He noted that the budget also envisaged lowering income tax factors. The Greek minister said budget spending, excluding interest rate payments, will rise to 27.9 pct of GDP next year, from 27.8 pct this year, despite earmarking more funds on social benefits and investments.
Primary spending are projected to slow to 7.3 pct in 2008, from 11.7 pct in 2007, while the central government’s net revenues will total 60.052 billion euros, or 24.5 pct of GDP, from 23.7 pct this year.
Tax proceeds are projected to rise by 12.9 pct next year to 22.3 pct of GDP, from 21.1 pct in 2007.
Source: Athens News Agency
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