Greece will raise its monthly minimum gross wage by 6.4% to 830 euros, the conservative government said on Friday, the fourth such increase in five years aimed at easing the burden on households squeezed by a higher cost of living.

The increase, which was widely expected, will benefit hundreds of thousand of workers, said the government, which survived a no-confidence vote on Thursday.

The monthly minimum wage was raised by 9.4% to 780 euros in April 2023.

"Today's decision will relieve workers without affecting the strength of the economy and the competitiveness of businesses," Prime Minister Kyriakos Mitsotakis told his cabinet.

Greece's economy expanded by 2% last year, slightly lower than the government's projection but still well above the euro zone average of 0.4%. It expects growth of 2.9% this year buoyed by tourism, increased investments and domestic demand.

"We are implementing one more step to fulfil our pre-election commitments," Mitsotakis added.

The government, which won re-election last June, has promised to raise the monthly minimum wage to 950 euros by 2027, when its term ends, and increase the average wage by more than 25% to 1,500 euros in the same period.

It has also pledged to increase public sector wages and pensions further as part of its economic recovery following a decade-long debt crisis that slashed incomes across the board.

Mitsotakis said earlier this month that there was no fiscal room for a one-off handout to support the most vulnerable, a common practice in recent years, and that he preferred increasing wages instead.

The EU parliamentary elections in June will be the first official test of the government's popularity since its re-election.

Greece emerged from a series of international bailouts in 2018 and last year regained investment-grade status from credit rating agencies after 13 years in the "junk" category due to its overwhelming national debt. (Reporting by Renee Maltezou and Lefteris Papadimas; Editing by Hugh Lawson)