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)
