Greece to table 2027 draft budget with 2.3% growth target and €5B relief package

Submission and growth targets

The Greek government will submit its draft budget for 2027 to Parliament on Monday, October 5, 2026. Minister Kyriakos Pierrakakis and Deputy Minister of National Economy and Finance Thanos Petralias will present the fiscal framework, which sets economic growth targets ahead of the final budget submission in November. The draft projects real gross domestic product growth of 2% in 2026, accelerating to between 2.2% and 2.3% in 2027. Domestic activity will be supported by private consumption, which is projected to expand by 1.5% in 2027 following a 1.6% increase in 2026, alongside a 4.2% rise in exports of goods and services. Labour market projections indicate unemployment will decrease from 8.3% in 2026 to 7.9% in 2027, while nominal gross domestic product will reach between €262 billion and €263 billion.

Inflation revisions and energy assumptions

Energy price volatility and regional instability in the Middle East have prompted repeated revisions to consumer price forecasts. The draft budget projects average inflation for 2026 between 3.6% and 3.8%, representing a second upward revision from the 2.2% forecast in December 2025 and the 3.2% projection submitted to European authorities in April 2026. Officials note that a preliminary September inflation estimate of 5.1% from Eurostat could necessitate further adjustments before the final budget text is tabled. For 2027, inflation is forecast to decelerate to between 2.4% and 2.7%. The macroeconomic baseline incorporates Brent crude oil assumptions between $80 and $89 per barrel for 2027, up from $64 per barrel in the previous budget plan.

Fiscal balances and European talks

The fiscal plan projects a primary budget surplus exceeding 3% of GDP in both 2026 and 2027, although the baseline target is set at 2.4% with potential upside reaching 3.7% if value added tax receipts remain elevated. Public debt is projected to fall from between 136.8% and 137% of GDP in 2026 to between 130% and 134.4% in 2027, assisted by economic growth and early repayments of outstanding loans. In Luxembourg at the end of the week, Pierrakakis and Petralias will attend Eurogroup and Ecofin meetings scheduled for October 8 and October 9. Greek representatives intend to coordinate with Italian delegates to request European fiscal flexibility, proposing the use of surplus value added tax revenues generated by high energy prices to fund consumer support.

Relief measures and public investment funding

In the final quarter of 2026, the government will disburse between €1.15 billion and €1.2 billion in household relief, including €879 million for an expanded €400 pensioner allowance, €261 million for rent rebates, and €16 million for widow pension adjustments. For 2027, unlegislated measures totaling €2.2 billion will take effect, bringing total annual support to €5 billion when combined with existing provisions. Key measures include the abolition of the business levy outside Attica, reductions in presumptive income tax for compliant self-employed workers, lower tax rates for farmers, property tax exemptions for primary homes in settlements up to 2,000 residents (or 2,200 in Western Macedonia), and an intermediate 25% tax rate on rental income. With the European Recovery Fund concluding, state investment will shift to the Public Investment Programme, providing €11 billion in 2027 (€4 billion national and €7 billion co-funded) before scaling upward through 2030. Additional fiscal space of €350 million to €400 million may become available in April 2027 once Eurostat validates 2026 fiscal results.