Greece increases spending by 5 billion euros in 2026 - Draft budget predicts economic expansion by 2.4% next year
Greece's draft budget for 2026 foresees a spending increase of 5 billion euros compared to 2025, mainly driven by investment spending for the Recovery and Sustainability Fund, which ends in August next year.
Expenditures from this fund are expected to reach 7.192 billion euros, up from 4.9 billion euros this year, an increase of 46.7%. In total, the Public Investment Program will reach 16.7 billion euros.
The €5 billion increase in spending will also be the result of measures announced last month in Thessaloniki, as well as additional purchases of weapons systems. The draft budget, however, does not deviate from the limits on the increase in nationally financed primary expenditure, as set out in the new budgetary rules.
Next year's budget will rely mainly on indirect tax revenues, as in recent years. From 24.2 billion euros in indirect taxes in 2020, these revenues are expected to reach 40.8 billion euros in 2026, with VAT having increased by 16.6 billion euros during this period.
A large part of this expansion is due to inflation, as citizens pay more VAT on their daily transactions, as well as thanks to the increase in tourist arrivals.
Economic growth is expected to increase from 2.2% this year to 2.4% in 2026, while inflation will reach 2.2%. Unemployment in the country is expected to fall to 8.6% next year. Meanwhile, national debt is estimated to reach 145.4% of GDP this year, slightly below the level of 147.8% in 2010, when Greece entered the first aid program. In 2026, this debt is expected to decrease by 7.8%, reaching 137.6% of Gross Domestic Product.
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