The Fourth National Assembly that was formed after the elections of 1923 took measures that inflated excessively the public expenditure. On May 3, 1924 the Papanastasiou government presented the budget of the financial year 1924-25. The revenues amounted to 3,945,000,000 drachmae while the expenditure reached 4,232,000,000 drachmae. That signified that there was a deficit of 287,000,000 drachmae. Ultimately the deficit came to 990,000,000 drachmae. The Michalakopoulos government, whose minister of Finance was K. Gotsis, elevated the limit of the National Defence treasury bills. Another aspect of Michalakopoulos' policy was the materialisation of major public works, which created however extra charges to taxpayers.
Ultimately, the expenditure of the financial year 1924-1925 was 6,015,000,000 while the revenue amounted to 5,758,000,000 drachmae. Exchange reserves fell from 1,822,000,000 in May 1924 to 716,000,000 until December. During the same period, circulation moved from 4,699,000,000 to 5,2292,000,000 drachmae with a constantly rising inflation. Gotsis estimated that from the deficit of the two financial years 1923-24 and 1924-25, 914,000,000 were appropriated for the refugees' settlement. The financial year 1925-26 presented a commensurate increase of the expenditure. As a result of this monetary policy the drachma wavered and its devaluation against the pound was precipitated.