Greek PM says economy will recover 5.9% this year and describes tax exemption

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File photo: Greek Prime Minister Kiriakos Mitsutakis will attend the civil ceremony for newly appointed members of the government at the presidential residence in Athens, Greece on August 31, 2021.Reuters / Costas Bartas

September 11, 2021

By Karolina Tagaris and Lefteris Papadimas

Athens (Reuters) – Greek Prime Minister Kiriakos Mitsutakis said on Saturday that economic growth would be higher than expected at 5.9%, including tax cuts and other tax cuts to help ailing businesses and families of the coronavirus pandemic. Announced remedies.

Greece emerged from the decade-long financial crisis in 2018, but again last year regulations fell 8.2% to curb the spread of the COVID-19 pandemic, which is also a tourism industry important. I gave it a shot.

The government’s medium-term financial plan called for growth of 3.6% in 2021.

“Today we are announcing the revision of the 2021 (growth) target from 3.6% to 5.9%,” Mitsutakis said in an annual political speech in Thessaloniki.

“Our country is stronger today than it has been for years. It is economically strong and geopolitically strong, ”he said. “The image abroad has changed.

To offset the rise in energy and other basic necessities caused by soaring global gas and shipping prices, Mitsutakis said the government had set a 13% VAT rate for coffee and goods. soft drinks, tourism, cinemas and gymnasiums. He said he would keep it low. It is also spending 150 million euros to subsidize electricity bills, thereby providing more heat distributions to poor families.

It will also cut pension contributions by 3 percentage points, the so-called solidarity income surcharge will end for another year in 2022, and corporate tax will drop from 24% to 22% next year. Merged SMEs will benefit from a 30% tax reduction.

demonstration

As Mitsutakis said, more than 15,000 people protested against issues ranging from economic policy to coronavirus vaccines. There was a clash between anti-vaccine protesters and police officers who fired tear gas and water cannons to disperse the crowd.

Greece’s economy grew 3.4% in the second quarter of this year, beating expectations and giving the government the opportunity to seek tax breaks.

Thanks to the recovery in consumer spending and investment, its annual growth rate reached 16.2%.

Analysts expect second quarter growth to be primarily driven by lifting lockdowns, stagnant demand and state support, not tourism, and its impact will be apparent in the third quarter. He was.

Due to the stagnation of global travel due to the pandemic, the Greek tourism industry hit a record year in 2020, with just 7 million visitors, compared to a record 33 million in 2019.

The sector, which accounts for around a fifth of the economy and a fifth of employment, generated a turnover of 4 billion euros, or less than a quarter of 18 billion euros in 2019.

The government says it expects 40% to 50% of 2019 levels this year.

(Edited by Gareth Jones)

Greek PM says economy will recover 5.9% this year and describes tax exemption

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