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Greek PM says economy to rebound 5.9% this year, outlines tax relief

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Greek Prime Minister Kyriakos Mitsotakis attends a swearing-in ceremony of the newly appointed members of the federal government on the Presidential Palace in Athens, Greece August 31, 2021. REUTERS/Costas Baltas

ATHENS, Sept 11 (Reuters) – Greek Prime Minister Kyriakos Mitsotakis mentioned on Saturday the economic system was set to develop by a better-than-expected 5.9% this 12 months and introduced tax cuts and different reduction measures to assist companies and households strained by the coronavirus pandemic.

Greece emerged from a decade-long monetary disaster in 2018 however noticed its economic system hunch once more by 8.2% final 12 months amid restrictions to curb the unfold of the COVID-19 pandemic, which additionally harm its important tourism trade.

The federal government’s medium-term fiscal plan had projected progress of three.6% for 2021.

“Right now we’re asserting the revision of the (progress) goal for 2021 from 3.6% to five.9%,” Mitsotakis mentioned in his annual coverage tackle within the metropolis of Thessaloniki.

“Our nation is stronger at this time than it has been in a few years. It’s stronger economically, it’s stronger geopolitically,” he mentioned. “Its picture overseas has modified.”

To offset worth hikes in power and different important items pushed by hovering international gasoline and transport costs, Mitsotakis mentioned the federal government would preserve the decrease 13% VAT charge for espresso and comfortable drinks, tourism, cinemas and gymnasiums. It will additionally spend 150 million euros in electrical energy invoice subsidies and provide extra heating handouts to poor households.

It is going to additionally reduce pension contributions by three proportion factors, a so-called solidarity tax surcharge on incomes shall be terminated for an additional 12 months in 2022 and company tax shall be lowered from 24% to 22% subsequent 12 months. Small companies that merge will profit from a 30% reduce in taxation.

PROTESTS

As Mitsotakis spoke, greater than 15,000 folks protested over points starting from financial coverage to coronavirus vaccines. Clashes broke out between anti-vaccine protesters and police who fired tear gasoline and water canon to interrupt up the gang.

Greece’s economic system grew by 3.4% within the second quarter of this 12 months, beating forecasts and giving the federal government fiscal house to proceed with tax reduction measures.

Its annual enlargement charge hit 16.2% because of a pick-up in shopper spending and investments.

Analysts attributed the second quarter’s progress primarily to the lifting of lockdown measures, pent-up demand and a lift from state assist measures, and fewer to tourism, the influence of which is anticipated to be manifested within the third quarter.

Because the pandemic introduced international journey to a standstill, Greek tourism suffered its worst 12 months on document in 2020 with simply 7 million guests in contrast with a document 33 million in 2019.

The sector, which accounts for a couple of fifth of the economic system and a fifth of jobs, introduced in income of 4 billion euros, lower than 1 / 4 of 2019’s 18 billion.

The federal government says it’s relying on 40% to 50% of 2019 ranges this 12 months.

Enhancing by Gareth Jones

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