ATHENS — The Greek government on Tuesday unveiled an ambitious draft budget for next year, the latest sign the country is making progress in its economic recovery after years of painful austerity and international bailouts.
The government projected that the economy will grow 2.5 percent next year, after a 1.6 percent anticipated increase this year, a further sign of Greece’s confidence as it looks to wean itself off the financial assistance it has relied on for the last eight years. Athens has also tapped international debt markets in recent months, indicating it is able to command the confidence of overseas investors.
The 2018 budget also forecast a primary surplus — cash in the Treasury after expenses and before debt payments — of 2.4 percent this year, higher than the country’s creditors anticipate.
The budget “will mark the country’s exit from a long period of macroeconomic adjustment,” Greece’s Finance Ministry said in a statement accompanying the proposed budget.
The details of the budget will be scrutinized when representatives of the country’s international creditors return to Athens this month, before it goes to a vote in Parliament on Dec. 22.
There are doubts, however, over how realistic the government’s forecasts are. This year’s growth forecast of 1.6 percent has been revised down twice, from an original 2.7 percent. And figures released by the European Union’s statistics service in September pointed to a shy recovery in Greece, with growth of 0.8 percent in the second quarter.
Still, the budget highlights the stark difference between the challenge facing Greece in recent years and the one it must grapple with today.
Greeks have suffered through years of austerity, including cuts to pensions and tax increases, slashing incomes by a third. Unemployment has skyrocketed in that time, leaving more than a quarter of the population jobless at the peak of the crisis in 2013.
In the latest budget, however, unemployment is estimated to slide below 20 percent, a marked decline, though still the highest in the 19-nation eurozone.
And while the budget itself lays out a series of new austerity measures, from increases in social security contributions to cuts to subsidies for heating oil, there is some additional spending for Greeks. The Finance Ministry pledged a payout averaging 483 euros, or about $570, for 1.4 million Greek households, just days after the country’s prime minister, Alexis Tsipras, promised €1.4 billion would be dedicated to Greeks on low incomes.
Mr. Tsipras first came to power in 2015 as a leftist firebrand on a pledge to roll back austerity. But he reversed course after the country reached the brink of crashing out of the eurozone and signed Greece’s third international bailout. Since then, he has introduced a series of belt-tightening measures in exchange for loans, but has always insisted that his ultimate aim is to lighten the burden on Greeks.
He has also demanded relief from Greece’s crippling debt burden, which is expected to stand at just under 180 percent of gross domestic product next year, according to the budget. The rate remains the highest in the eurozone and has prompted calls by European leaders and the International Monetary Fund for a restructuring, with talks on relief expected to begin the second half of next year.