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Economy

“Twin crisis” Is Limiting Fiscal Space for Additional Support Measures, FinMin Says

November 17, 2021

ATHENS – The state budget, to be tabled to Parliament on Friday, does not include additional support measures for any sector of the economy, based on the existing fiscal space, Finance Minister Christos Staikouras said on Wednesday.

In comments made to SKAI TV, Staikouras said that during the last year and a half the restaurant and related businesses sector has been supported with 2.3 billion euros and that it will continue to be supported with programmes in 2022. The FinMin said the government’s priorities were formed based on the intensity and the extent of the energy and health crisis and were focused on limiting the negative impact on households. He noted that this “twin crisis” was limiting the space for additional measures, although he stressed that a discussion with the prime minister in early December will examine if any more fiscal space can be created.

Staikouras said that the finance ministry will offer a positive recommendation on a plan to raise the minimum wage for the second time in 2022 and reiterated that the state budget envisaged a GDP growth rate of around 7% this year. The finance minister said he expected the inflation rate to rise by 0.5% this year and by 1.0% in 2022, although he noted “I would not be surprised if the inflation rate rose even higher in November and December, up to 4%.” He sounded optimistic, however, that the inflation rate would begin falling in the first quarter of 2022 for products and services and in the second quarter of 2022 for energy costs.

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