Greece's Ministry of National Economy and Finance presented six headline elements of the 2026 state budget and, for the first time, a parallel multi-year fiscal plan with projections to 2029. The package combines a demographic-focused tax reform and targeted income-support measures with higher public investment and increased spending on health, defence and civil protection, alongside a fiscal stance targeting a 2.8% primary balance in 2026 and lower public debt. The budget assumes real GDP growth of 2.4% in 2026 and an investment-to-GDP ratio of 17.7%, supported by a Public Investment Programme of EUR 16.7bn. Total employee compensation is projected to rise by 4.4% in 2026, with net compensation estimated to be up 32% versus 2019 compared with 22.1% cumulative inflation over the same period; the minimum wage is described as more than 40% higher than in 2019, with a further increase planned for April 2026 and a stated target of EUR 950 by 2027 from EUR 880. On expenditures, the Health Ministry budget is set at EUR 8.2bn in 2026 (from EUR 4.1bn in 2019), defence at EUR 7bn (from EUR 3.5bn in 2019), and the Climate Crisis Ministry at EUR 1.44bn (from EUR 560m in 2022). The ministry costed legislated or announced fiscal interventions at EUR 3.04bn for 2025, EUR 5.94bn for 2026 and EUR 7.94bn for 2027, including income tax reductions differentiated by number of children, gradual abolition of ENFIA on primary residences in small settlements (up to 1,500 inhabitants, or 1,700 near borders), a 30% VAT rate cut on certain Aegean border islands (up to 20,000 inhabitants), a 25% tax rate on rental income (from 35%) and an annual rent refund each November to 80% of tenants. It also referenced a recent Fitch upgrade and noted that five of the six major credit rating agencies place Greece two notches above investment grade. Measures referenced as taking effect from 1 January 2026 include items announced for implementation at the start of the year, with reduced payroll tax withholding expected to lift net pay in January 2026 payslips; further increases to the minimum wage and a horizontal pay rise for public employees are planned for April 2026. The debt ratio is projected at 138.2% of GDP in 2026 (from 145.9% in 2025), with a stated objective for debt to fall below 120% of GDP by 2029.
Ministry of National Economy and Finance (Greece) 2025-11-27
Greece's Ministry of National Economy and Finance sets out 2026 budget with demographic tax reform and a 2.8% primary surplus target
Greece's Ministry of National Economy and Finance unveiled the 2026 state budget and a multi-year fiscal plan through 2029, focusing on tax reform, income support, and increased public investment. The budget targets a 2.8% primary balance in 2026, with real GDP growth projected at 2.4% and a debt ratio of 138.2% of GDP. Key measures include tax reductions, increased minimum wage, and significant spending on health, defence, and civil protection.