Greek PM to unveil plan to boost incomes ahead of elections

ATHENS, Sept 4 (Reuters) - Greek Prime ‌Minister Kyriakos Mitsotakis ​will announce ​more than €2 billion ($2.33 billion) in tax breaks, pay rises and other handouts on Saturday, officials said, as he seeks to recover lost ground in ‌opinion polls ahead of next year's election.

His center-right government, which was ⁠re-elected with 40.5% in 2023 promising to increase incomes, remains ahead in opinion polls but has seen its ‌support slip to about 29% ‌amid a protracted cost-of-living crisis and corruption claims.

The measures, which Mitsotakis will unveil during his annual economic policy speech on Saturday, are equal to 1% of GDP and will ​include pension increases, a new rise in minimum salary, tax breaks for the self-employed and small businesses, and relief measures for farmers, three government officials said.

"The measures ⁠will include almost all social groups and the farmers without putting at risk the country's fiscal health," one of ​the officials said without giving more details.

Strong economic growth, a higher-than-expected budget surplus and more comprehensive tax collection will help finance the package, ​which will come into force in 2026 and ‌2027, they said.

Some of the tax breaks will extend over a four-year period, a second official said.

Greece's economy is expanding at an ⁠annual rate of 2%, outpacing the euro zone average. It expects a primary surplus worth about 4% of gross domestic product this year, almost double its initial forecast, giving the necessary fiscal space ⁠to fund the new measures.

However, unemployment is at 7.9%, compared with the EU average of 6.1%, ​and GDP per capita in purchasing power is among the lowest in the bloc.

The average monthly income remains at 2009 pre-crisis levels of €1,500, according to Labor Ministry data, with food prices, energy and ‌residential rents at least 30% higher since then.

In December, thousands of farmers took to the streets to demonstrate over low prices of ‌their products, high energy costs and a farm aid fraud scandal that sparked political resignations and ⁠drew a hefty EU fine.

Labor unions ‌have planned demonstrations in ​Thessaloniki on Saturday evening asking for generous wage increases and lower prices for everyday goods and energy.

($1 = 0.8601 euros)

(Reporting by Lefteris Papadimas; Editing by ‌Sharon Singleton)

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