The Greek economy has received a “triple” blow from the catastrophic floods with the financial staff trying to estimate its cost as quickly as possible in view of the submission of the draft budget to the Parliament in two weeks.
The first one is the fiscal cost – on which the primary surpluses of 2023 and 2024 will depend. The second one is its impact on the debt and the third one is the cost at the level of economic activity. The last one is the most important.
Losses in GDP affect everything from disposable income and tax revenues to Greek debt ratios.
The direct fiscal cost – that is the costs that will affect the 2023 and 2024 budget – must constitute a priority, as it will affect the draft budget, but also the prime minister’s speech at the weekend at the Thessaloniki International Fair (TIF).
The direct fiscal cost is the sum of the money that will be paid to compensate those who have suffered damage to their homes, businesses and agricultural crops or livestock. At the moment, it is estimated that the total amount – which will be died in the 2023 and 2024 budgets – will range between 750 million euros and 1 billion euros.
However, safer assessments will be made after the submission of all the applications from the affected. Therefore, the direct fiscal cost is likely to exceed 2 billion euros, but in any case a safer estimate will be able to be made after the waters recede and the full recording of the damage to private and public properties is concluded.
