Greece’s state budget continues to outperform expectations, recording a surplus of €1.964 billion in the January–August 2025 period, surpassing the projected deficit of €1.38 billion set in the 2025 Budget. The primary surplus reached €8.5 billion, exceeding the target of €4.93 billion by €3.57 billion and marking a notable improvement over €7.57 billion in the same period last year.
The robust fiscal performance is driven by a combination of economic growth, higher VAT revenues, improved tax collection, and inflationary effects. For August 2025, VAT revenues totaled €2.48 billion, exceeding the target by €150 million, while income taxes fell short by €181 million and excise duties (EFKs) were slightly down by €5 million.
Government Spending and Fiscal Policy
The Greek government has already committed €1.7 billion in benefits announced by Prime Minister Kyriakos Mitsotakis at the Thessaloniki International Fair (TIF), including tax cuts for young people, families, and the middle class, alongside increases in wages and pensions.
Chronicling fiscal discipline:
- Net state revenues reached €48.46 billion, up 0.4% or €184 million versus target.
- Tax revenues before refunds totaled €46.52 billion, 4.6% above projections, bolstered by strong collections in income tax, VAT, and excise duties.
- Income tax revenues stood at €17.31 billion, exceeding the target by €1.135 billion, driven primarily by higher personal income tax receipts.
Key Tax Category Performance
- VAT: €18.185 billion, +€507 million above target
- Excise Duties (EFKs): €4.857 billion, +€83 million above target
- Property Taxes: €1.983 billion, +€73 million above target
- Income Taxes: €17.306 billion, with personal income tax +€828 million, corporate income tax -€38 million, other income taxes +€345 million
Reimbursements of taxes totaled €6.181 billion, including €784.8 million from Attiki Odos concession revenues, leaving net tax revenue €5.396 billion, +€685 million above target.
Public Spending Overview
Total expenditures for the period amounted to €46.494 billion, €3.161 billion below budget, due mainly to the timing of transfers to social security funds and defense program payments. Key allocations included:
- Healthcare and hospitals: €897 million
- Universal service energy costs (YKO): €400 million
- National Health Procurement Authority (EKAPY): €377 million
- Public transport subsidies (OASA, OASTH, OSE): €251 million
- Universities: €145 million
Investment spending reached €7.04 billion, slightly below the target by €106 million but up €491 million versus the same period last year.
The strong budgetary execution provides fiscal room for continued targeted tax reliefs and social support measures, reinforcing Greece’s economic resilience. Analysts note that sustained revenue overperformance will be crucial in offsetting inflationary pressures and maintaining Greece’s investment-grade outlook.