Greece Submits 2027 Budget Draft Targeting 2.3% Growth, Debt Below 130% GDP

Finance Minister Kyriakos Pierrakakis submitted the 2027 state budget draft to Parliament on Monday, projecting economic growth of 2.3% next year, up from 2% in 2026. The plan forecasts inflation easing to 2.6% from an estimated 3.8% this year, while nominal GDP is expected to reach 274.6 billion euros.

The budget includes a fiscal package worth 5.035 billion euros, combining 2.2 billion euros in newly announced interventions with 2.8 billion euros from previously legislated measures. Key items include a minimum wage hike in April 2027 paired with a 0.5 percentage point cut in employee social security contributions, costing 163 million euros, and public sector pay raises linked to the minimum wage at a cost of 382 million euros.

“The Greek economy is projected to continue recording significantly higher growth rates than the eurozone average for a seventh consecutive year.”

The primary surplus is projected to remain above 3% of GDP at 3.3%, equivalent to 9.15 billion euros. Public debt is forecast to fall below 130% of GDP in 2027, down from below 137% this year, driven by growth, high primary surpluses, and early loan repayments.

Investments are expected to rise 7.9% in 2027, pushing the investment-to-GDP ratio to 18.6%. The plan allocates 11 billion euros for the Public Investment Program outside the Recovery Fund and 1.5 billion euros in new lending and guarantee schemes for SMEs via the Hellenic Development Bank.

Unemployment is projected to drop to 7.9%, the lowest level since 2008, while compensation per employee is seen rising 3.9% in nominal terms. The draft was prepared amid heightened geopolitical uncertainty from the wars in Ukraine and the Middle East, with a 200 million euro reserve set aside for potential energy crisis needs.