By Lefteris Papadimas
ATHENS (Reuters) - The Greek government is forecasting economic growth of 2.3% in 2025, outperforming Europe's major economies, thanks to strong tourism revenues, robust consumer spending and investment, a 2025 draft budget showed on Monday.
Greece, which is still recovering from a debt crisis that nearly saw the country drop out of the euro zone in 2015, is projecting a 2.2% rise in its economic output this year.
The government trimmed its previous estimate for 2025 growth of 2.6% in April due to a stagnating European economy, a key source of investment and tourism in the country, along with high inflation.
The estimates in the draft budget are in line with Athens' fiscal plan unveiled last week and submitted to the European Union for approval.
The draft budget saw downside risks from the conflicts in Ukraine and the Middle East, along with possible new geopolitical tensions.
More than half of foreign direct investment into Greece comes from northern European countries, while two-thirds of the country's exports such as agricultural goods, fuel and pharmaceutical products go to the EU.
The draft budget includes higher spending of about 3.5 billion euros next year and tax breaks to fund pension hikes and support for vulnerable households.
This will be funded by a bigger primary budget surplus, which excludes debt-servicing costs, seen at 2.5% of gross domestic product (GDP) next year, up from 2.4% this year, a key condition for Greece to keep its debt - currently at the highest ratio to GDP in the euro zone - sustainable.
Since emerging from a bailout in 2018, Greece has regained its investment grade ratings last year, revived its banking system and relied solely on debt markets for its borrowing needs. But unemployment remains at 10% and the average monthly salary is 20% lower than 15 years ago.
Public debt is seen dropping by five percentage points to 149.1% of GDP in 2025 from 153.7% this year.