The door is open for a new support package – What factors judge it

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As officials of the Ministry of Finance, as expected, state to skai.gr, there is no other fiscal space, that is, we have spread our legs as far as our blanket reaches. However, this does not mean that the door to additional measures to support households and businesses is permanently closed

Of Chrysostomou Tsoufi

With the € 375 million of the 2nd fuel subsidy package announced by the Ministry of Finance, the interventions to address energy accuracy already exceed € 8.4 billion by the end of the year, with € 3.3 billion of this weighing on the state budget.

Indicative:

  • 850m € subsidy for electricity and gas from 1 July
  • € 500m in general government agencies subsidy for fuel and energy
  • 320m € aid to the socially vulnerable in April
  • 280m Power Pass
  • 300m € Energy Pass
  • 225m € subsidy on diesel

Right now as expected they state in skai.gr officials of YPOIK there is no other fiscal space, that is, we have spread our legs as far as our blanket reaches. However, this does not mean that the door to additional measures to support households and businesses is permanently closed, and that is because the same conditions that enable the government to make announcements of interventions are expected to continue to apply or even be strengthened.

First, the course of GDP has given rise to great expectations. The 7% growth of the first quarter was above and beyond all expectations and the precursor indicators foretell very positive results for at least the next 2 quarters. It is no coincidence that many government officials – albeit not so publicly yet – speak of very conservative growth forecasts at 3.1% this year as reflected in the budget.

Budget revenues are literally frantic, exceeding € 2.1 billion in the first five months, aided by the continuing decline in unemployment.

The third factor is tourism. The financial staff estimates receipts at 80% of those of 2019 but may be positively refuted. April data show more arrivals, higher revenue and higher per capita expenditure than the corresponding period of 2019 and the first indications for May are just as encouraging.

The … landscape is obscured by the course of the gas that has been causing some concern in the last week. The calculations of YPOIK for the interventions in electricity – the flagship of its interventions until the end of the year – has been made with a base price for natural gas of 100 € / MWh. Every € 10 increase in this price (currently at € 125 / MWh) deducts € 500-600m from GDP on an annual basis and requires an additional € 300-400m from the budget.

Fiscally, the next quarter is extremely crucial, especially if the rumors about elections in the fall are confirmed, which means that for a long time, as usual in Greece, the country will enter the … automatic.

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