How Greek debt is heading for 100% of GDP: the estimates of the Wood Company investment firm

The absorption of the economic agenda is connected the taxation cuts and enactment measures announced by Prime Minister Kyriakos Mitsotakis astatine the TIF for the adjacent 2 years, according to concern steadfast Wood & Company. The package, estimated astatine €1.76 cardinal successful 2026 (0.7% of GDP) and €2.5 cardinal successful 2027 (0.9% of GDP), includes wide income taxation cuts, enactment for families with children, alleviation for young people, and caller wage scales for uniformed personnel.

Tax rates are reduced by 2 percent points successful astir each but the lowest and highest brackets. At the aforesaid time, a caller standard with a little taxation complaint (39% from 42%) is introduced for incomes of €40,000-60,000, portion the apical standard remains astatine 44%. The Prime Minister besides announced important alleviation for families with children: households with 4 children and an income of up to €20,000 are afloat exempt from income tax, portion smaller families volition spot important reductions successful rates.

Of peculiar value is the alleviation for young people. Those up to the property of 25 volition wage nary taxation connected incomes up to €20,000, portion for those aged 26-30 the taxation volition beryllium conscionable 9% alternatively of 20% successful the €10,000-20,000 income bracket. In the periphery, VAT rates successful distant areas are reduced and the implicit abolition of ENFIA successful tiny towns is progressing by 2027. In this way, the authorities is attempting to respond to some the demographic contented and the request to enactment the countryside.

The downward inclination successful debt

Despite the outgo of the caller measures, the strategy of fiscal subject remains unchanged. Greece has consistently recorded higher surpluses than the targets – successful 2024 connected a currency ground the superior surplus reached 5.1% of GDP and successful the archetypal 7 months of 2025 it had risen to 6.5%.

Thus, the indebtedness is connected a wide way of deceleration. From an all-time precocious of 212.8% of GDP successful 2021, it has fallen to 152.5% successful Q1 2025, with the authorities targeting 149.1% astatine the extremity of the year. Wood appears much optimistic, forecasting a further autumn to 144.2% successful 2025, 134.5% successful 2026 and conscionable 101.3% successful 2030. If this script comes to fruition, the state volition person reduced its indebtedness by implicit 110 percent points of GDP wrong a decennary – cementing its instrumentality to a stable, investment-grade system erstwhile and for all.