Alexis Tsipras said sales-tax reductions for household energy bills and for food and catering would take effect later this month, while additional relief measures would be introduced at the start of 2020, easing some of the steep taxes imposed during three successive international bailouts.
Tsipras is trailing opposition conservatives in opinion polls — by double digits in some surveys — before local government and European elections later this month and a national election that must be held by early October.
"With immediate effect, we are taking action to relieve those who have shouldered the burden of the crisis," he told a news conference. Greece's budget performance in 2018 was better than expected, with a primary budget surplus, excluding debt servicing costs, of 4.4%, while creditors demanded a 3.5% surplus.
The economy is expected to grow by 2.2% this year with unemployment easily slightly, according to an updated forecast announced Tuesday by the European Commission. But more than a third of Greeks still live in poverty or at risk of poverty and average wages have continued to drop after the bailout ended last August.
Representatives of European creditor institutions are currently in Athens to check if the government is abiding by commitments to modernize the economy and public administration allowing it to repay bailout loans that make up the bulk of its massive national debt of around 180% of gross domestic product.
Tsipras announced the measures after two successful bond auctions earlier this year and a decision last week by the eurozone rescue fund to grant Greece debt relief measures worth nearly 1 billion euros ($1.1 billion). He faces a vote of confidence in parliament expected this Friday following a spat with the main opposition party over remarks made by his deputy health minister. The vote is unlikely to topple his government.
Nicholas Paphitis in Athens contributed. Follow Gatopoulos at http://www.twitter.com/dgatopoulos