The key parameters of the first draft budget for 2020
The first draft of the 2020 budget, to be tabled in Parliament on Monday, provides for meeting the primary surplus target while implementing the tax cuts promised last month by Prime Minister Kyriakos Mitsotakis. This is a challenge the government will try to meet over the coming days in talks with the country’s creditors, who insist there will be a fiscal gap next year.
According to the first draft, the government is banking on three main parameters to achieve a primary budget surplus of 3.5 percent of gross domestic product: the improvement in tax revenues this year that will be the springboard for an improved performance in 2020, the measures to expand the tax base (such as increasing online transactions), and the acceleration of growth through easing taxes and strengthening entrepreneurship. The latter parameter is seen as crucial, as the government expects it to add up to 0.5 percentage points to the growth rate.
In an interview with Kathimerini, Deputy Finance Minister for Fiscal Policy Thodoros Skylakakis estimates that not only will the primary surplus make the 3.5 percent target this year, but there will also be a small overrun again. He said this overrun will go toward boosting growth and helping vulnerable members of society, with sources speaking of an increase in the heating oil allowance, among other interventions.