Tags: Greek | Budget | Deficit | Shrinks | Revenue | Lags

Greek Budget Deficit Shrinks 30 Percent as Revenue Lags

Wednesday, 10 Nov 2010 02:12 PM

Greece’s state budget deficit shrank 30 percent in the first 10 months of the year, slipping below a 32 percent goal for the period, as cuts in state wages and pensions offset slower-than-forecast increases in revenue.

The deficit, which doesn’t include spending by state-owned institutions and companies, contracted to 17.4 billion euros ($23.9 billion) from 24.8 billion euros a year earlier, according to a statement today from the Finance Ministry in Athens. The government is targeting an annual decline of 36.9 percent, the ministry said.

Ordinary budget spending fell 7 percent. Net ordinary budget revenue rose 3.7 percent, inching up from a 3.6 percent increase in the first nine months of the year, still short of an 8.7 percent annual increase target for the whole year. Increased revenue is expected in the last two months of the year from income, property and road taxes and a tax amnesty, the ministry said.

The European Union, the International Monetary Fund and the European Central Bank have all said that Greece needs to do more to strengthen tax collection and secure revenue. Meeting deficit targets is key to Greece receiving regular payments of the 110 billion euros in emergency loans from the EU and IMF.

Deficit Target

The budget deficit goal for this year is 7.8 percent of GDP according to the draft budget for 2011 presented on Oct. 4. That estimate and others are likely to change after Eurostat, the EU’s statistics office, announces a revision of the 2009 deficit, with the ministry saying today there will be an “update” on the estimates of the 2010 budget up to the end of the year.

Greece’s budget shortfall this year will be 9.5 percent of gross domestic product after a revision of 2009 data, Kathimerini newspaper reported, without citing anyone, due to the inclusion of debt from state-owned companies and other agencies in the wider public sector and a 2 billion-euro shortfall in revenue this year. A Greek Finance Ministry official wouldn’t comment on the report.

Final figures for the deficit to October are due on Nov. 22.

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Greece s state budget deficit shrank 30 percent in the first 10 months of the year, slipping below a 32 percent goal for the period, as cuts in state wages and pensions offset slower-than-forecast increases in revenue. The deficit, which doesn t include spending by...
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2010-12-10
Wednesday, 10 Nov 2010 02:12 PM
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